Michael Kidron

The Fight for Socialism – 2

(January 1958)

From Socialist Review, 8th Year No. 2, Mid-January 1958, pp. 5–6.
Transcribed by Ian Birchall, Nina Kidron & Richard Kuper.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

In the December Young Socialist we printed the opening of our new pamphlet, The Fight for Socialism? By MICHAEL KIDRON, in which he examined the workings of capitalism, and showed how accumulation occurs at the expense of the workers.

THAT WAS in 1956. Last year the same process went on, and this year, and next will see it continue. Every year more and more profits are ploughed back into industry; every year the industrial machine becomes bigger and more productive. The more productive it becomes, the greater the quantity of goods that has to be sold in order that the process of accumulation can go on. During the first phase of consumption, say after a war, when a lot of old machinery has to be replaced and consumer goods are scarce, there is no trouble in disposing of the goods. Investments that immediately lead to greater output can find markets; those that take a longer time to start production, like steel mills that need five years or so to build, have no immediate effect on the quantity of goods to be sold. Eventually, however, a market must be found for the increased production, and this is where capitalism breaks down.

A shoe manufacturer, for example, must sell all his shoes before he can cover the outlay (wages, raw materials, etc.) spent on their production and also buy the new machines and raw materials needed for expanding production. By the time he has increased his output he must expand his sales further and so on indefinitely. The same is true of all capitalist firms. The machinery firm will expand production of machinery for the shoe manufacturer, the mining company will extract more iron-ore for the machinery firm and the other capitalists will follow suit (some more, some less) as long as the shoe manufacturer can find a market. When the shoe-manufacturer has grown so big that he can’t find a market everything crashes into a slump.

Why can’t a capitalist always find a market? In Britain, manual and professional workers receive enough in wages and salaries to buy about two thirds of the total national product. The capitalists use up about half of the rest on their inflated standard of living (taxes take a share of both these items) and the rest goes in investment. But eventually these investments produce still more goods and still the manual and professional workers and the capitalists use up only 85 per cent of the product in current living expenses.

Another 15 per cent has to find some other market. If it can’ be sold, it means that the capitalist can’t buy more machines – can’t accumulate. And if a capitalist can’t accumulate, he won’t produce. Production stops in one industry, workers are locked out, they buy less and other capitalists, finding their markets dwindling, stop production, throw out their workers and shrink the market for yet other capitalists. This is a rough picture of a slump such as we had during the ’thirties. It shows a world of unemployment and misery just because capitalism produces too much. The crisis of capitalism is a crisis of overproduction.

Capitalist “Solutions” to Overproduction

Compelled by competition to keep wages down as much as possible, the capitalists will not raise wages (unless forced to do so by the unions) because that would reduce the funds left for accumulation, and, eventually, would mean that he loses to his competitors.

But the fact remains that wages have been rising and that we don’t live in a state of perpetual slump. Why not? Can capitalism solve its problems?

Imperialism: Once, surplus production was unloaded on to the colonies. The 15 percent of Britain’s national income was shipped to India, Africa and elsewhere. The same is happening to-day with two crucial differences: now the productive forces of Britain and the other capitalist countries are so much bigger than they were a hundred years ago that they could swamp the colonial and semi-colonial markets and still not get rid of their problem (in 1950 Britain produced roughly 9 times as much as in 1850). Secondly, the backward countries themselves have started to industrialise. Their own capitalists need their markets themselves. In order to progress at all, they find it imperative to cut themselves loose from the better-equipped imperialist powers. For them the struggle for national liberation is a condition of existence; for the capitalists in the imperialist countries it means that outlets for surplus capital are getting smaller and smaller.

Riding the Slump: Another method of getting rid of the surplus stocks so that the process of accumulation can once more get started is to let the slump take its full course. Stop producing here, destroy stocks there and then, once again, the ball of accumulation will start rolling. This too has become dangerous, too dangerous to be tried again. Last century it could be done without much trouble. Workers could be thrown on to the streets to starve without risk for the capitalist class. After all, labour organizations were still in their infancy. To-day, however, things are different. Workers’ solidarity is a force to be reckoned with; we have learned the power of collective action. During the depression immediately preceding the first World War, British capitalism (like its European counterpart) had a revolution staring it in the face. The Great War saved the situation by stepping up production. The post-war slump led to the gigantic upheavals of 1919–20 and to that glorious working class rearguard action – the 1926 General Strike. The slump of the ’thirties also rocked the capitalist boat dangerously. Again the capitalists saved their property and their skins by entering the war and creating full employment. Slumps are dangerous for the ruling class – they can mean a Socialist Revolution. Anything, anything but a slump !

Stagnation and Surplus Capacity: What is the capitalist answer to a slump? The most important thing is to maintain full employment and so “keep the workers happy.” For some time this can be done by preventing the introduction of labour-saving devices or their use. In Britain to-day we have full employment, but we also have a mass of idle resources. Hundreds of millions of pounds have been invested in the motor industry over the last few years, automation has been introduced, and yet the output of cars has barely risen at all. Of course, the Tories’ credit squeeze is to blame in part, but the lack of markets is the major reason for this accumulation of surplus capacity.

War: But stifling economic progress is not a complete answer to a slump. The size of the surplus to be disposed of can be kept down, but it cannot be eliminated altogether, otherwise profits would not be made and accumulation would not go on. There is only one way the capitalists can get rid of their surpluses, accumulate and escape the dangers of unemployment at one and the same time – by running a war economy.

In the financial year 1957–58 about £1,440 million is to be spent directly on the ‘defence’ budget in Britain; what the indirect expenditure on planes, ships, roads, etc., will be, one cannot tell. Of course we are made to believe that the armaments budget is an unfortunate necessity thrust upon the capitalist producers who would gladly produce less lethal commodities. In a sense they are right. It is a necessity to make profits from organized death when the
bottom falls out of the market of the living.

The civilian market can quickly be saturated, the war market is a bottomless pit; a chair can be used time without number, a shell – only once. Bombs must be replaced every fraction of a second in time of war. Even in ‘peace-time’ the Koreas, Cypruses, Suezes, Kenyas, Malayas, Algerias and army training grounds get rid of quite a lot of them.

Last updated on 16 February 2017