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Ernest Lund

Answering GM’s Argument:

More Output, More Wages?

(10 December 1945)

From Labor Action, Vol. IX No. 50, 10 December 1945, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The insulting counter-proposal of General Motors that workers should work forty-five hours a week at straight time in order to earn a living take-home wage has already been answered on two counts in previous articles of this series.

This article is devoted to the argument of GM’s president, Charles Wilson, that more hours of work mean more production. More production, says Wilson, means more goods and a higher standard of living for everyone.

This, thinks Wilson, is a smashing argument – for dolts and idiots who cannot count beyond three.

How Does It Operate?

If our economic system worked as simply as the family farm, Wilson’s proposal would make sense. Down on the farm, the whole family pitches in to do the work. When there is more work, everyone works more. When there is less work, everyone works less. During the late summer and early autumn the crops are harvested, the corn is husked, the silo is filled with fodder for winter, the fruits and vegetables are “put up” by the women folk for the long winter ahead, and, around Thanksgiving Day, the family sighs a “well done” and prepares to take things a little easier.

If everyone worked hard and if the crops were good, there will be checks in the mail and food to eat. The whole family will enjoy some of the fruits of their labor. The fact that the “work’s all done” is something to regard with pleasure.

But how does it operate in the capitalist system under which we live? Because labor works harder and longer does not necessarily mean that it will share in the increased production. Quite the contrary. We already showed why longer hours result in lower wages. Increased production will usually result in layoffs because the market becomes glutted. Instead of everyone relaxing and working less and eating more, the capitalist shuts down his plant and goes to Florida for a vacation while the worker goes to the relief station to ask for a hand-out. He has produced himself out of a job.

The essential difference between the family farm and GM is that the farm is owned by the same people who work it while those who own GM do not work in it, and those who work in it do not own it.

What Is Capitalism?

Capitalism, as Karl Marx pointed out long ago, separated the producer from his tools. The owner of the tools (plants, machinery, railroads, etc.) buys labor power (or hires workers, as we would say) to operate them. The more they produce, the higher his profit. When it is not profitable to produce, he lays off the workers.

Capitalism has made of labor power a commodity to be bought on the labor market. As with any other commodity, the cost of labor power (wages) is determined by the cost of production. The cost of production of labor power is in the main what it takes to maintain the worker at his accustomed standard of living. It is, therefore, the cost of living which determines wages under capitalism. (For a more exact description of this process, see Wage Labor and Capital, by Karl Marx.)

Increased production can lead to a surplus of goods on the market unless labor has sufficient buying power to buy back the product of industry. Under capitalism, labor is never paid enough to buy back all that is produced. If it were, the capitalist would not retain a margin of profit, since it is the difference between what is paid to labor and what the capitalist receives for his products that determines his profit. Increased production without increasing wage rates will only create a surplus that leads to unemployment and wage cuts.

Production levels were very high in 1929, the peak year of the so-called prosperity period. However, it did not result in “more for everybody.” It resulted in one of the worst depressions in history.

Labor and Socialism

Labor is in favor of increased production. A high productive level is necessary if we are to achieve a high standard of living. Even with the best fighting unions, the workers of a country like China could not achieve a much higher standard of living. However, a high productive level is not the result of long hours. Chinese coolies work twelve to fourteen hours a day and still their country is poverty-stricken. A high productive level is the result of modern mass production methods. This is the secret of American output.

This is the basis of the standard of living in this country. However, American workers have not been GIVEN a higher standard merely because the level of production has increased. It has not been GIVEN to them at all. They organized and FOUGHT for it. Part and parcel of that fight has been the fight for shorter hours.

General Motors can never sell its idea of longer hours and more production to any worker who is willing to use his head for something more than a place to keep his hat. Labor’s first concern is higher wage rates and a shorter work week.

Once the workers have organized to take over political power in this country and introduce a socialist system of production, then more production will mean more for everybody. The more we produce, the more we would eat. The more backlog of products we would have, the less we would work until we had used them up. This will be so because socialism will wipe out the distinction between the owners of the machine and the users of the machine. The working class will become the owners AND operators. The separation between the worker and the means of production introduced by capitalism will be ended by socialism.

Until such a socialist system prevails, wage labor will remain a commodity to be bought on the market by capital. The wages of labor will continue to be determined by the cost of living. It must therefore be the aim of labor to fight for higher wage rates and a shorter work week and let the capitalists worry about production.


CORRECTION – In my article of November 19 headed Long Hours Depress Wages, the following sentence appeared: “We pointed out that Karl Marx had long ago shown that under capitalism the wage level is regulated but not determined, in the main, by the cost of living.” The emphasized words “regulated” and “not” were inserted by the editor without my knowledge. The original sentence was correct. Marx stated that the cost of living did determine wages, in the main. Wages are regulated by the competition of workers for jobs in the labor market, i.e., by the law of supply and demand. This is stated simply and precisely in Wage Labor and Capital.

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