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Albert Gates

The Question in Everyone’s Mind

Can U.S. Post-War Capitalism
Provide Jobs for Everybody?

(1 April 1946)

From Labor Action, Vol. X No. 12, 1 April 1946, pp. 1-M & 3-M.
Transcribed & marked up by Einde O’Callaghan for ETOL.

The war economy organized by the Roosevelt Administration brought about a number of changes in the United States which cannot fail to have important bearing on the future economic and political life of the country. There is hardly a person who does not know what occurred in general. The government organized and directed the war economy. Unemployment, which remained at the high level of between nine and ten million during the highest peacetime year of production in 1940, was liquidated almost overnight. An economy unprepared to meet the requirements of modern total war supplied the whole Allied camp with all the materials of war within a short period of time. Production expanded at a rate far exceeding all previous experience. While these things are known in general, it is the concrete developments which are not known.

Yet, in the concrete expansion of the American economy are to be found all the grave problems which confront the working class. A few examples will suffice to illustrate the tremendous changes which took place during the war and to indicate the insoluble problems they have created for American capitalism and the new problems created for the working class.

Government Directs Big Business Program

The government organized the war economy. This is the first point to bear in mind. The government determined what was needed for the war. It supplied the plans, the capital, the material, the plants, the tools, set the rate of profit for the capitalists, froze the wages of the workers, controlled the labor supply and in general supervised production so that we had, in effect, a state-directed economy during the war. Private industry merely carried out the government programs for which it was repaid in the biggest profits in American economic history.

The war economy program was a big business program. The reason for this is obvious. War production could not be carried out by small plants and individual producers. It could only be done by the immense mass production plants, by the monopolistic enterprises. Thus, the multiple boards in Washington were in the hands of the representatives of big business who controlled the whole war economy and conducted it entirely in the interests of monopoly industry and banking. Because of government organization, direction and planning, the following immediate results were produced:

  1. There was a rapid and continuing rise in production and a vast expansion of industrial plants.
  2. Unemployment, which almost ten years of the New Deal could not solve, was liquidated practically overnight.
  3. There followed an absolute growth of the labor force, i.e., the size of the working class.

Production rose from the record peacetime year of $100 billion in 1940 to $155 billion in 1943. While in 1940 only $2 billion was devoted to war production, by 1943, $85 billion represented the share of war production. By 1944 production had risen to $198 billions (allowing for price adjustments).

The volume of manufactured goods outpaced all other production. It had tripled within a period of five years, indicating the tremendous possibilities inherent in the American productive apparatus to supply the necessaries of life, when, as a matter of fact, it was concentrated on the production of machinery of destruction.

Manufacturing capacity prior to the war (including government arsenals and navy yards) was estimated to have cost $40 billion. Even with this manufacturing capacity, capitalism could not maintain full employment at a time when production was rising. In five years of war, $25 billion in new plants and equipment, and cost of converting to war, were added to the $40 billion. Of this new manufacturing capacity the government expended $17 billion or two-thirds of the above amount.

To meet the requirements of war production and to make use of the expended manufacturing capacity created by new plants, an absolute increase of the working force was needed. The working class grew from 54 to 64 million (including the armed services) in the five war years, or an increase of 20 per cent. This factor is of immense importance in assessing the prospects of unemployment in the coming peacetime years, again remembering that until the war broke out, capitalism was unable to liquidate unemployment.

When the war was drawing to a close, government economists began to concern themselves with the problems of production and employment in the post-war period. They knew that unless production was maintained at a rate comparable to the war years, the economy was destined to experience a sharp crisis through a decline in production and consequent rise in the mass army of unemployed. The “liberal” capitalists, the New Dealers and their economists and statisticians, demanded that private industry must maintain full production and full employment to prevent the chaos of a post-war crisis. If private industry would not adopt such a program, said these New Dealers, the government would have to guarantee high production and full employment. The Roosevelt Administration adopted the slogan of : 60,000,000 jobs! President Truman reindorsed this program.

Problems of Post-War Economy

The capitalists, however, rejected this program with full knowledge that the costs of such a program would indeed be heavy for them. The program of the New Dealers aimed at maintaining peace at home because they know that low production and mass unemployment creates the conditions of intensified class struggle and they want to save the disintegrating system of capitalism by making concessions to the people without changing the profit character of society. This program big business rejects. Big business feels powerful and rich. It is determined to solve its problems by heavy blows against the working class and by a general lowering of the standard of living. And their program will prevail over that of the New Dealers in the next period as it is prevailing now.

Capitalism is a profit system wherein production is carried on for market and for the enrichment of the capitalist class. This class will resist any efforts to encroach on its property and profit rights. The immediate post-war period has already provided ample proof of this fact in almost every action of Congress and the Administration. Tax rebates to guarantee the high wartime profits of business have been passed. Wages have declined sharply, while prices rise and the cost-of-living has continued to mount over the war years. No steps have been taken to alleviate the abominable housing conditions which are universal. Congress deliberates over vicious anti-labor measures and in general proves over and over again that the government in Washington is a government of the capitalist class.

The situation in the country is not yet severe. Actually, we are witnessing the beginning of a post-war boom based on many millions of workers still at work, a large demand of consumer goods following the war and vast accumulated reserves. But this boom cannot and will not last long. The capitalists know that in a short period of time this condition will cease to exist. They know that their chances for continued production and vast profits lie in foreign trade, in complete control and domination of the world market.

Capitalism Cannot Achieve Stability

The war solved not a single important problem for capitalism. It did not bring peace, freedom and security for the peoples of the world. It merely resulted in the defeat of one group of rivals of American imperialism and brought into existence new rivals. Because the future of American capitalism lies in its economic and political conquest of the world, we will witness an increasing imperialist policy developed by the native capitalist class and its government. It is for this imperialist policy that the ruling class and its political and military servants are pressing for permanent peacetime conscription. In addition, we are witnessing an increasing militarization of life and a tendency toward peacetime totalitarianism which is reflected in the dispute over the control of atomic energy and the continued rule of government by decree.

American imperialism, however, will not find it easy to achieve its world aims. To achieve them it requires peace, stability and order. But the outstanding feature of the world today is that there is no durable peace, no stability, no equilibrium. These factors only make American imperialism more determined and more ruthless in its expansion with the result that peace, stability and order will become increasingly impossible.

The disintegrating and decaying character of world capitalism will have a pronounced effect on the still powerful American capitalism which is completely intertwined with world economy. It cannot and will not escape the disintegrating influences of a world society in decline.

The American working class is not wholly unaware of these prospects for capitalism and what it means for the mass of people. This is already reflected in the great struggles now taking place. These struggles presage even greater ones to come. The working class is now struggling for security, to prevent the burdens of a peacetime economy with declining production, employment and standard of living from being placed on its shoulders. The working class realizes that all the promises made to it during the war, were never meant to be kept; that the wage freeze, the long hours of work, the high cost of living were its rewards for the tremendous sacrifices made during the war. It. increasingly realizes that the war benefited only one class: the capitalist profiteers.

The working class has seen what the government was capable of doing for war, for the purposes of worldwide destruction. It observed how the government planned economy, provided the capital, new plants, material and the means to maintain a high level of production for destruction. It will not easily understand how and why a government which is capable of doing that in the interests of war cannot and will not provide for full employment, a rising standard of living and the well-being of the people during peacetime.

A Period of Great Class Struggles

The present struggle for higher and guaranteed wages is a forerunner of new and greater struggles on the part of the working class. Already, the present strikes developed beyond ordinary bread and butter struggles. In the GM strike the UAW was compelled by the extreme urgency of the situation to raise the slogan of “Open the Books,” which was a slogan of tremendous political and social implications, for it challenged the very structure of capitalist property relations.

The working class of this country is a powerful and militant class. It has great confidence in itself. Its great weakness however, is that it has little political and class consciousness. But this is a development which is certain to come, a development which has been hastened by the war and which will be intensified in the coming struggle for security and existence in which the majority of the workers will participate.

The struggle of the working class will become increasingly political in this period. Idle plants and mass unemployment will strengthen the demand for nationalization of industry under the control of the workers. The working class will learn in these struggles that no reliance can be had in the Democratic and Republican Parties, both instruments and servants of big business. It will be compelled to travel the road of independent political action. For while the American workers know how to fight on the economic front, they have as yet no positive program by which to combat the capitalist class politically. Yet, upon the political development of the working class as an independent, anti-capitalist force depends its whole future.

The great task of the revolutionary socialist is to assist and hasten this political development of the American working class as the first stage in its class conscious development which will put it on the high road toward the socialist emancipation of humanity from capitalist unemployment, misery, wars and insecurity.

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