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Lewis Corey

The Decline of American Capitalism

PART FIVE
Unemployment, Technology, and Capitalism

CHAPTER XVI
The Economics of Technology

THE absolute displacement of labor by technological progress is not a result of technology itself. “Technological unemployment” is a convenient term with, however, a limited application. In one sense, it describes the unemployment of workers whom new machines have deprived of jobs or skills or both. In another sense, it describes the element in increasing unemployment which is brought about by improved technological efficiency and not by a decrease in production. But technological unemployment becomes permanent only if there is an insufficient rate of expansion in production or if working hours are not reduced in conformity with the higher productivity of labor, both of which factors make it impossible for industry to absorb displaced and newly available workers. Hence permanent unemployment, the surplus population, is essentially a social-economic problem, not a technological one, and is the result of capitalist incapacity to adjust consumption to production.

Yet technology is, within the limits of the social relations of capitalist production, a causal factor of first importance. It conditions the whole process of production, including unemployment. Where the rate of expansion is upward, industry might provide work for all available workers if technological efficiency did not disproportionately raise the productivity of labor. Where the rate of expansion is downward, as in depression and in the epoch of capitalist decline, technological displacement of labor adds to the unemployment already created by the lower level of production. Technology is an accelerating factor in economic development. It has, moreover, an antagonistic and disruptive impact on capitalist production, which has allowed technology to become a demon it cannot control.

But this must be true only because of the black magic of capitalist decline. For technology is a part of the progress of mankind, since man is a tool-making and tool-using animal. When it was crude and empirical, technology was dwarfed by the natural environment. Its development strengthened man’s control over natural forces and, consequently, his capacity to produce. When technology, under capitalism, became the purposive application of science to industry, it resulted in an enormous increase of the productive forces of society and of man’s mastery over nature. Now these developments are undermining capitalism. Technology is being limited in its progress and uncontrolled in its results. The great productive forces of society bring permanent unemployment and want in the midst of plenty. And the mastery of natural forces threatens universal ruin because of its use for destructive purposes of war. Thus capitalism reacts against progress. It makes necessary a new social order in which technology, stripped of its capitalist limitations, becomes more fully and creatively the purposive application of science and the means of man’s mastery over his environment and himself. [1*] ...

As the mechanical equipment of production, materials, and processes, and the accumulation of technical knowledge and skills, technology is the basis of industry. It determines the material relations of production; and it influences, but is itself also influenced by, the prevailing property, class, and social relations. The mode of production as a whole is decisive, and not its technology. Thus technology is not an independent but an historical factor; its forms, development, and uses are interlocked with the social-economic relations of production. It is the mode of production as a whole which is decisive, and not merely its technology. The emphasis on technology as an independent factor distorts both the understanding of history and the understanding of present-day problems.

The technology and economics of production inseparably condition one another, but their relative importance varies in time and place. Technology has acquired an accumulating influence. It was small in primitive society, where man was dominated by his natural environment; yet even here man could not have become man without the making and using of tools. In ancient civilizations, the slowness of technological change was a primary cause of the slowness of social change, which, with the contempt-for-work spirit of slave cultures, hampered the development of technology. There was no direct technological influence on the great change in the mode of production from slavery to serfdom; it was the result of the economic-political breakdown of the Roman Empire, of slave agriculture having become unprofitable, and of the introduction of new labor relations in agriculture. But technology tremendously influenced the coming of the Renaissance and the commercial revolution. While the early Middle Ages were retrogressive or stagnant in their technology and economy, an increasing number of significant inventions and technical improvements were developed from the tenth to the fourteenth century. There were new forms of harnessing for work animals and an improved plow; wind and water mills, mechanical clocks, a new type of plane, improved bellows, and better construction methods; the compass and the steering rudder for ships; more efficient processes in metal working; many other improvements in tools and many new machines (one, for example, to press the heads of pins and a silk-reeling machine operated by a water wheel); the use of gunpowder and the casting of increasingly larger cannon. [1] Gunpowder and cannon “democratized” war and had an explosive effect on the hierarchical organization of society. The technical-economic changes led to division of labor and specialization of crafts, stimulated the rise of industry, trade, and the commercial bourgeoisie, and influenced social life and mental conceptions by an increasing production and distribution of old and new products. Improvements in tools and the construction of more complex machines stimulated the rise of experimental science, of the practical spirit of doing which is a characteristic of both science and the bourgeoisie. Experimental science itself requires a technology. New vistas opened up in all fields of life. All these changes merged into the commercial revolution of the sixteenth and seventeenth centuries, which was, however, essentially a social-economic, not a technological, process. While it was accompanied by many improvements in tools and machines, the distinctive features of the commercial revolution were the growth of the trading class, increasing production for the market, emergence of the class of “free” wage-workers, expropriation of the peasants from the soil and the creation of a labor reserve [2*], development of the world market, breakdown of the system of independent handicrafts and guilds, increasing division and specialization of labor in the early factory system, and the rise of large-scale capitalist enterprise. These changes in the mode of production prepared the conditions for the industrial revolution of the eighteenth century, in which technology was relatively the most important factor. They developed all the essential features of the factory system, whose basis is not machinery but the specialization and division of labor for more economical production. All the fundamental social relations of capitalist production – free wage labor, separation of the worker from the means of production and their conversion into capital, the system of production for profit, price and the market as “regulators” of industry – conquered the older economic relations during the period of the commercial revolution. The technological revolution of the eighteenth century did not create the social relations dominating the development and functioning of modern technology. It is these relations which create the “technological” problems of to-day. Socialism means a change in the social relations of production, not in its technology ... Another aspect of the overemphasis on technology is the overemphasis on energy or power as the decisive factor in both technology and economics. An American “technocrat” and professor of industrial engineering says: “For a period of about 6,000 years, before the beginning of the nineteenth century ... civilization was dependent on the energy of man power for the goods and services provided ... From the technologist’s point of view there was no social change whatever during all this vast period of time. There was no change in the rate of doing work.” [2] But energy can no more be separated from technology in general than technology can be separated from the mode of production as a whole. During that “changeless” period of time, man developed the basic features of technology, in the gradual improvement of his tools, materials, and processes. There were social changes of the utmost importance. Even in the field of energy there was the introduction and increasingly more efficient utilization of wind and water power. Technology moved slowly, but it moved, augmenting man’s control over nature and his capacity to produce. Without the constantly greater accumulation of technical equipment and knowledge from the thirteenth to the eighteenth century (including steam engines used for pumping in mines), there could have been no development of a new source of power. And the industrial revolution was ushered in by fundamental changes in machinery, not in power.

The technology of tools and machines already in existence served as the starting point for the development of new machinery which culminated in the industrial revolution. An increasing construction of larger and more complex machines improved mechanical engineering and led to the technological application of scientific discoveries. In the early factory system, where formerly independent craftsmen worked together in one shop under control of a capitalist, tools were improved and simplified, and many new forms of tools were created to meet the requirements of increasing specialization and division of labor. This simplification and multiplication in turn suggested the mechanical combination of tools into machines. The early factory used constantly more machinery, particularly in the making of metal products; in one metal factory there was an imposing array of water-driven slitting, pressing, shearing, and rolling machines. [3]

The machine of the industrial revolution was basically a contrivance which mechanized existing tools and reproduced manual actions. [4] The tool formerly held and operated by the worker was incorporated in the machine, thus combining and mechanically operating a number of identical or similar tools. A machine might incorporate only a single tool, but it increased the power, speed, accuracy, and capacity to produce. The manual actions of crocheting and knitting were mechanically combined in the stocking knitting machine. Prior to the invention of spinning machinery the spinner held a single thread between the thumb and forefinger; this was replaced by the movable carriage in Hargreaves’ spinning jenny. Mechanical substitutes for the human fingers appeared again in the rollers of Arkwright’s spinning frame, which twisted the yarn as it was wound on the spindles. While the machines of the industrial revolution were essentially mechanized tools reproducing manual actions, this is true only in part and frequently not at all of a whole series of machines created by later technological developments, which also increased enormously the importance of apparatus, a means of production totally dissimilar to machines and tools. As machines became more complex and heavier, they stimulated the search for a new source of power. Water power was used more and more, but it involved limitations in the location of industry, and the relatively inefficient water wheels were incapable of moving very heavy machinery. Newcomen’s steam engine was limited to pumping in mines, until Watt transformed it into a mechanism which from reciprocating motion produced the rotary motion necessary to drive machines. Human and water power were displaced. A single prime mover was now able to supply power to several working machines; and the factory became a weird maze of belts, ropes, and pulleys whirling overhead and alongside the machines. The steam engine and the new and heavier machines it made possible required large amounts of iron; this stimulated the development of new techniques in metallurgy, a combination of mechanical and chemical improvements.

The final phase of the technological revolution was the great change in metal working, in the production of means of production. Existing metal-working machines were neither powerful enough nor accurate enough to produce the precise parts needed for the new machines, especially the steam engine. The creation of an industry manufacturing the mechanical equipment of production, a basic necessity of the new industrial capitalism, required making the construction of machinery itself a function of machinery, increasingly independent of the skill and muscle of the worker. Machine tools, which shape metal into wrought forms by bending, pressing, shearing, paring, and boring, had to become larger, more powerful, and of greater precision. The trend of developments was symbolized in the slide rest, a device replacing the highly skilled operator, who formerly held and guided the cutting tool, with an ordinary worker who simply turned a screw handle; and the worker himself was displaced when the slide rest was made automatic. “This mechanical appliance does not replace another tool but the human hand itself ... Thus it became possible to produce the geometrical forms requisite for the individual parts of machinery ‘with the degree of ease, accuracy and speed that no accumulated experience in the hand of the most skilled workman could give’.” [5] The liberation of machine tools (and of machinery in general) from the limitations of manual labor resulted in the transformation or disappearance of the tool formerly operated by a skilled worker. But the scope of labor was enlarged, quantitatively in the performance of heavier work and qualitatively in greater accuracy. Machinery did work which manual labor could not do and did better the work which it could do. The construction of machinery became increasingly dependent upon the “replacement of human force by the forces of nature, and of rule-of-thumb methods by the purposive application of natural science.” [6]

By the 1830’s all the fundamental aspects, including the central one of labor displacement, of the new technology were clearly evident, particularly in England. All subsequent technological developments have had essentially an accelerating and quantitative influence.

1. The progressive realization of the technical function of machinery revolutionizes the relations between labor and production (and social-economic relations in general), a development which increasingly conditions the nature of machinery. The creation and improvement of tools emphasized the primacy of manual labor in production; technology was essentially an accumulation of manual skills in operating tools. But machinery transfers skill to the machine, and subordinates the worker to the mechanical equipment of production; technology becomes essentially an accumulation of engineering knowledge and skills, and of machines, apparatus, and processes which constantly reduce the relative importance of manual skill and human labor. The early factory, in contrast to the independent handicrafts, needed and used large numbers of unskilled workers; they were greatly augmented by the machinery of the industrial revolution, most evident in the preference given to women and children in the textile mills. New skills arose, especially in the construction of machinery; but they, and unskilled workers in general, were gradually replaced by semi-skilled labor as machines became more efficient and automatic. The automatic principle, although at first imperfectly realized, is inherent in machinery. And the automatic principle means not merely the transfer of skill to the machine but eventually of all work itself. The machine is an arrogant monster. It seeks to be sufficient unto itself, to displace the human worker, and tends to make the worker a technician who repairs, controls, and directs.

2. The new technology, with its constantly greater demands for mechanical equipment and raw materials, profoundly altered the composition of capital. In the early factory system, in spite of the increasing use of machines, the main element in production was still human labor; the composition of capital was low, with a preponderance of variable capital (wages) over constant capital (equipment and materials). Factories were small, moreover, and did not absorb any large amounts of capital. And while the factory was increasing in importance, the “putting out” system existed on a large scale. In this system, the craftsmen provided their own tools and worked in their own homes; the commercial capitalist, who marketed the product, supplied the raw materials but did not invest capital in equipment and factory buildings. As a whole, consequently, production needed little fixed capital. This was changed by the technological revolution. Machinery and factory buildings made larger investment in fixed capital necessary. The investment became still larger as machines increased in size and number, with a corresponding increase in the size of factories. More raw material was consumed as the efficiency and the scale of production rose. Thus constant capital was continuously augmented. There was an absolute increase in the number of workers; but the rising productivity of labor brought about a relative displacement of workers, and variable capital (wages) fell steadily in relation to fixed capital, raw materials, and output.

3. The higher composition of capital necessarily meant an increasing concentration of industry. This tendency appeared very early in the iron and steel industry, which was transformed by the industrial revolution. As fixed capital requirements grew rapidly, the formerly small and decentralized concerns became larger and more integrated; they mined ore and coal, smelted, refined, rolled, and slit the iron in its finished forms. [7] Profits were high, but competition was savage and failures many; the industry started a series of amalgamations, increasing both the scale of production and the fixed capital requirements. The process of concentration went on inexorably, if unequally, in all branches of industry, urged onward by the constantly greater scale of production, the mounting capital requirements, and the intensification of competition, in which the bigger capitalist usually devoured the smaller. Concentration was encouraged by the increasing technological application of science and its production of machines both more efficient and more expensive. The mechanization and concentration of industry thrust aside both the independent producer and the commercial capitalist. Up to the industrial revolution, the commercial capitalist, who was interested mainly in the marketing of goods, was dominant. He was replaced by the industrial capitalist, who assumed responsibility for the whole process of production. Small producers were either expropriated or permitted to survive only in comparatively unimportant branches of industry. The middle class was transformed; one part rose into the class of large industrial capitalists, who now dominated the bourgeoisie, the other part became increasingly an intermediate, subordinate class of petty traders, managerial (including technical) employees in large-scale corporate enterprise, and professional workers.

4. The new technology raised the productivity of labor tremendously. But it lagged behind the existing possibilities, national and international. For the introduction of new machinery did not depend merely upon its efficiency, but upon whether it saved enough in wages; in other words, upon whether it aided the capitalist in the competitive struggle and in the making of larger profits. England, moreover, tried to monopolize the fruits of technological progress, to prevent other countries sharing in them. The uneven development of capitalism meant that at any particular time or place the utilization of new machinery might not be profitable. “That is why to-day,” Marx wrote, “machines are sometimes invented in England which can only be put to use in North America; just as, during the sixteenth and seventeenth centuries, machines were invented in Germany which were only put to use in Holland; and just as many French inventions of the eighteenth century were only utilized in England. In the older countries, machinery, when employed in some branches of industry, creates such a superfluity of labor (‘redundancy of labor’ is Ricardo’s phrase) in other branches, that in these the fall of wages below the value of labor power hinders the use of machinery, and, from the standpoint of capital, whose profit comes, not from a diminution of the labor employed, but from a diminution of the labor paid for, renders that use superfluous and often impossible ... Before the labor of women and that of children under ten years of age was prohibited in mines, the capitalists found the employment of naked women and girls, often harnessed side by side with men, perfectly compatible with their moral code, and still more compatible with satisfactory entries in their ledgers, so that it was only after the prohibition had come into force that they had recourse to machinery. The Yankees have invented a stone-breaking machine. The English do not make use of it, because the ‘wretch’ [a recognized term for the agricultural worker] who breaks stone by hand is paid for so small a proportion of his labor that machinery would increase the cost of production for the capitalist.” [8] Nevertheless there was a constant increase in the productivity of labor because of the introduction of new machinery. And out of this arose the problems which now, in more acute form, torment capitalist industry. The development of the productive forces outstripped consumption. Classes other than the workers (including the old feudal aristocracy) gained most from the higher output of industry. Cyclical crises and depressions made their appearance, arising out of the dynamics of capitalist production itself. England tried to overcome the contradictions by cultivating the export markets, which did not abolish cyclical breakdowns but did accelerate capitalist development. One result, however, was mass starvation (particularly in the Hungry Forties) in the midst of relative plenty. Another result was the overdevelopment of industrialism (and consequent ruin of agriculture), which, “balanced” and profitable while England was the world’s workshop, was increasingly undermined by the progress of international industrialization.

5. Agriculture was the stepchild of the new technical-economic developments. The expropriation of peasants from the soil had already shown what capitalism had in store for workers on the land. The new technology was used in a very niggardly fashion in European agriculture, yet there was a great increase in productivity. Millions of farm workers were displaced, a new expropriation of peasants from the soil. They became the human raw material of the factory system or servants of the well-to-do. And as immigrants they became manual workers and servants in the United States. In spite of the limited use of the new technology in agriculture, even among American farmers, there was an increasing adoption of capitalist methods and concentration of production. But agriculture lagged behind the general economic progress. It lagged because the older social-economic relations lingered on, and because agriculture was exploited by capitalism. In the industrial countries of Europe, especially England, agriculture was discouraged in favor of intensive industrialization, which based the national economy on the export of manufactures and the import of agricultural products. In the United States it took the form of forcing agricultural expansion beyond the point where it was profitable, and using the farmers’ surplus to pay for the imports of capital necessary for rapid industrialization. And the exploitation of agriculture forced colonial and other economically backward countries to concentrate on the production of one or two crops, in the interest of foreign capitalism, with eventually disastrous results to the local economy. Technology, in the form of improved agricultural implements and means of transportation, facilitated the exploitation of agriculture. The plight of world agriculture to-day is the cumulative result of the whole development of capitalist production.

6. All the developments of the industrial revolution, its transformation of the technological basis of production, contributed in one way or another to the creation of a surplus population. The beggars, vagabonds, and adventurers, the outcasts of a feudal order which was breaking down from the fifteenth to the eighteenth centuries, were not a true surplus population; this is shown by the measures adopted by the absolute monarchy to force them to work, to develop a labor reserve for capitalist enterprise. Changes in the composition of capital and the resulting rise in the productivity of labor moved slowly, although some workers were displaced. The demand for labor usually exceeded the supply. Where workers were unemployed it was mainly because of the bad organization of the labor market. But the surplus population arising after the industrial revolution was the direct result of the workings of capitalist production itself. For industrial growth, the expansion of old and creation of new industries, required a large and growing labor reserve. Labor was displaced by the higher composition of capital. Productivity of labor, in general, rose faster than production. The rise, moreover, was uneven, haphazard; workers displaced in one industry were not absorbed by expansion in another. And, as yet, the production of capital goods was not sufficiently developed to provide employment for many workers. In addition to the displacement of workers by more efficient mechanical equipment, there was more displacement because of the barbarous exploitation of labor. Women and children were increasingly employed in preference to men. The working time, which was predominantly ten hours daily in the England of the seventeenth century, rose steadily as a result of the industrial revolution; by 1800 the 14-hour day was customary and the 18-hour day not unusual. [9] The surplus population was augmented by peasants who flocked to the towns looking for work. Wages fell under pressure of unemployed men and working women and children. It was an epoch of increasing misery for the working class.[3*]

The earlier industrialism was marked by an absolute displacement of labor and increasing misery among the workers. This was checked in the epoch of the upswing of capitalism, from the 1850’s to the 1890’s. In the more highly industrial countries working hours fell and wages rose. Much of the newer and more complex technology, in contrast to the crude machines of the industrial revolution, was incompatible with excessive fatigue. The military and political interests of the state, moreover, required an improvement in the living conditions of the workers. And the workers, organized by the mechanism of capitalist production itself, forced other improvements through their accumulation of economic and political power.

Lower working hours, more employment, and higher wages were made possible by greater production, the rising productivity of labor, and higher profits; in turn, these developments depended upon and constantly augmented the output and absorption of capital goods. The most important single factor in the increasing production of capital goods, the basis of the capitalist upswing, was the technological revolution in transportation. It flung, in addition to internal railroad construction, a net of iron rails and iron ships around the world, and absorbed more new capital and equipment than manufactures. (By 1890, American manufactures had 16,525 million of invested capital, the railroads $7,577 million.) [10] The construction of railroads in economically backward countries, including Europe, was the most important aspect of the British export of capital in the 1840’s and after. But the revolution in transportation was even more significant than the direct absorption of capital goods, for it broadened the world market and the international basis of capitalism. [4*] This enlarged the scale of production, and the amount and efficiency of machinery, by permitting the sale in foreign markets of surplus products which otherwise would have saturated the home market and held back economic and technical advance. In addition, recovery and prosperity after depression were frequently stimulated by new foreign markets and industrialization overseas (or, in the case of the United States, in its own continental areas), with its construction of railroads, urban transit, public works, and factories, requiring heavy imports of building materials and productive equipment from the more industrial nations. Technology combined with other factors to initiate and sustain the upswing of capitalism; for, unlike the tendency of to-day, new inventions did not merely improve the efficiency of existing equipment, but revolutionized the technological basis of a whole series of old industries (ships, boots and shoes, glass, iron and steel, printing, food, the use of metal in building construction), or created entirely new industries (railroads, electric power, telephones, pulp paper, urban electric transit). Underlying all these developments, in their influence on employment and the surplus population, were two fundamental factors:

1. The rate of increase in production was greater than in the productivity of labor. While in some cases productivity rose more than production, this was offset by the general development, and particularly the technical-economic creation of new industries.
2. The rate of growth in industries producing capital goods was greater than in the industries producing consumption goods. The efforts to raise the productivity of labor, the increasingly higher composition of capital, the enlargement of the scale of production, the revolution in transportation, and the construction needs in new, undeveloped areas – all these factors augmented the output and absorption of capital goods, whose production required a constantly larger proportion of the workers.

Because of these two factors, the displacement of labor was relative, not absolute. The expansion of production in general, and of the industries producing capital goods in particular, absorbed the majority of displaced and newly available workers. (Another, and increasingly important, factor was the growth of clerical, technical, and managerial employees in corporate industry, and of professional and service occupations.) The tendency toward the creation of a surplus population was checked.

But it was checked only partly and temporarily. Workers displaced by technological changes and the rising productivity of labor were not absorbed until after an intervening period of unemployment; and many of them, the highly skilled and the older workers, were either forced to accept lower-paid jobs or thrown into the ranks of the unemployables. Normal unemployment, the reserve army of labor, tended to rise, even if not as rapidly as in the earlier industrialism. And in periods of depression the tendency of capitalism to augment the surplus population appeared in all its unanswerable and terrible reality: for there was both an absolute and a relative increase in cyclical unemployment. The surplus population expanded much more in depression than it contracted in prosperity.

The partial and temporary check on the increase of the surplus population was, moreover, limited to the highly industrial countries. It was, in large measure, the result of the exploitation of economically backward peoples. The industrialization, after the 1850’s, of agricultural countries in Europe was distorted, made lopsided and incomplete, by the pressure of the more highly capitalist countries, from whom they imported goods and capital. Workers were displaced by the higher productivity of labor, which rose more than production. Increasing efficiency in agriculture displaced more workers than industry could absorb. [5*] Economic progress was sufficient to increase the population, but not to provide all with work. Only the great migrations overseas held the surplus population in check. Conditions were much worse in such colonial and semi-colonial countries as India, China, and Mexico. The import of foreign manufactures disrupted the native handicraft economy, aggravated by the growth of local industrialism. Disruption appeared also in agriculture, because of the increase in efficiency and the demand of the industrial nations for the production and export of one or two particular crops. Workers were displaced on a large scale; but industry could not absorb them, because its development was even more incomplete than in the newer industrial nations of Europe. Nor could emigration much reduce the surplus population, for most doors were slammed in the faces of colored peoples. Worst of all, however, were conditions in the tropical countries, in Africa and most of Latin America, in Malaysia and the Philippines. Natives were deprived of land upon which their livelihood depended, an expropriation from the soil much more brutal than in the Europe of the commercial revolution, with the deliberate purpose of creating a labor reserve of “free” workers. There was forced labor to build highways and railroads; forced labor in the mines and on plantations. In spite of all the forced labor, the surplus population grew. A handful of European nations (Britain, France, Germany, Holland, Belgium) secured cheap foods and raw materials, new markets for surplus goods and capital. But the economically backward peoples paid in sweat and blood, although the upper ruling layers shared in the spoils. All these developments, including Congo atrocities, colonial revolts and wars, were a part of imperialism, an essential element in the upswing of capitalism. But the upswing was, for the world as a whole, marked by growth of the surplus population and increasing misery among the masses.

The technology of the upswing of capitalism, in addition to the revolution in transportation, built upon and developed more fully the technology of the earlier industrialism. There was an increasing transfer of skill, machines became more precise and automatic, and they made larger capital investment necessary. These were universal trends, but they were particularly marked in the United States. “The keynote of the American development was mass production of standardized articles, each part of which was made by machinery designed for one task. Skilled labor was scarce; the frontier consumer wanted goods which were cheap, serviceable, or labor saving rather than polished, well finished and long of life ... The designing of special machines which could be attended and fed by unskilled workers therefore became the first manifestation of ‘Yankee ingenuity’.” [11]

New and improved working machines were adopted in one branch of manufactures after another. Not only were the earlier textile machines improved, but new machines were created for other phases of the work, for mechanization of one process makes necessary the mechanization of other processes. The characteristic of the Jacquard loom, whose system of cords simultaneously and automatically selected and moved the needed warp threads, was incorporated in a large variety of machines which performed mechanically all operations involved in the production of textiles. A collateral development was the application of machinery to the production of garments, initiated by the sewing machine. Starting with the invention of the skiving machine in 1845, a mechanization of the skiving knife, the making of boots and shoes was completely transformed by an intensive division of labor and specialization of machinery, based on one hundred operations and scores of machines. The manufacture of pulp paper, while essentially a product of chemical research and its industrial application, required also many new machines. By the 1870’s, paper making was almost entirely automatic. In a modern paper plant, the fluid pulp is fed in at one end and emerges as rolled paper at the other – all operations are automatic within the limits of the machine and apparatus. The making of steel was rapidly mechanized by means of machines and apparatus of immense size, complexity and capacity, forcing labor requirements down to a minimum. Use of the regenerative furnace with the continuous melting tank was followed by the mechanization of glassmaking and the perfection of the astonishingly complex Owens automatic bottle machine, which wiped out one of the most highly skilled groups of craftsmen. [6*] While the linotype machine replaced one skill with another, the printing press developed to the point where all operations are performed automatically by one giant machine. The canning of foods involved the use of almost completely automatic cooking and cooling apparatus, measuring devices, and can-packing machines. The milling, measuring, and packing of flour was mechanized until only a relatively trifling labor force was necessary. Workers were inexorably displaced, not only by the transfer of skill but of labor itself to the mechanical equipment of production, because of increasing realization of the automatic principle. In addition, scores of devices for homes and offices mechanized not merely manual skills but human intelligence, as in the case of calculating machines. Scientific research became constantly more technological, more and more organized on an industrial basis in great laboratories with intricate mechanical equipment and the division and specialization of labor. And the technological basis of agriculture was revolutionized by machinery, which, starting with improvements in the older implements and tools and the invention of a mechanical reaper, was augmented by an increasing variety of machines and implements. (In addition, there were advances in soil fertilization and in plant breeding.)

The construction of more and more diversified machinery could not have been accomplished without the greater automatization of machine tools and advances in the manufacture of interchangeable parts, the basis of mass production. Profound changes took place in the machinery industries from the 1850’s to the 1890’s, particularly in the United States, whose machine tools began to invade the European markets. While the parts of machines became more complex and varied, they also acquired more regularity, and this created new standards of precision for machine tools, indispensable in the production of interchangeable parts. These standards were made possible by innumerable improvements in machine tools and particularly by the development of the turret lathe, the universal milling machine, and the automatic screw machine. The turret lathe enhanced precision and control. Constructed in a variety of types, the universal milling machine displaced considerable manual labor, performed high quality work, and was peculiarly adapted to mass production, since the rigidity of the cutting tool and its multiple edges permitted accurate and cheap reproduction of shapes and forms. The automatic screw machine, several of which could be attended by one worker, meant production of cheaper and better screws. Hand filing had been formerly necessary, but it was now done more accurately and with less labor by improved machine tools. There were many other great advances. New tools developed, among them the pneumatic drill operated by compressed air and working at tremendous speeds. Higher speeds and deeper cuts, more than doubling the output of a machine, were made possible by the introduction of high-speed steel after the 1880’s; twenty years later machine-shop practice was revolutionized by the growing use of alloy steel for cutting tools. The greater the rigidity of the tool, the greater the precision and automatic character of operation; hence the development of jigs, fixtures, and other appliances to guide the tool or hold the work in place. Not only was machinery construction more purposively the technological application of science, it was increasingly liberated from the limitations of manual labor.

The transfer of both skill and labor appeared most clearly in apparatus, a means of production whose importance grew as the technological application of chemistry created new and modified old industries. Apparatus is most highly developed in the chemical industry with its vats, pipes, and similar contrivances, but it is also of great importance in other industries which require one or more chemical processes. It was first used on a large scale in the production and distribution of gas, in the chemical industry itself, in metallurgy, the manufacture of rubber, glass, and soap, the production of alloys, the refining of petroleum, and in electrolysis. With the development of synthetic products (dyestuffs, pulp paper, cement, celluloid, nitrates, rayon, regenerated and artificial leather and rubber, distillates of coal), whose technology involves complex chemical action and precise control, apparatus attained still greater significance. It makes usable formerly unused raw materials and makes possible new uses for many others; reproduces rare materials or creates new ones by synthetic transformation of common and widespread raw materials. Apparatus, whose output may be solid, liquid, or gaseous, produces a series of products, raw and finished, beyond the capacity of machines, and takes on constantly greater importance as production increasingly turns toward the synthetic. [12] (There are political aspects to this, in the efforts of nations to become independent of foreign raw materials.) Very little labor is needed in production by means of apparatus; it is highly automatic, the workers are either unskilled or semi-skilled, and act under orders of a handful of engineers whose work is also highly mechanized. More and more the mechanical equipment of production assumes the form of apparatus. This means a still higher composition of capital, driving toward the absolute displacement of labor and aggravating all the contradictions and antagonisms of capitalist production. Yet the promise of apparatus is great. For it makes possible more abundance – utilizing hitherto unusable and common raw materials, creating cheaply many new products. And it liberates mankind from the drudgery of production, lowering the amount of necessary labor and transforming it into higher forms ...

More automatic machinery emphasized the transfer of skill and labor and the specialization of machines. No more than average manual dexterity, intelligence, and attention are necessary to “operate” automatic machines. Although machines were built which performed all operations needed to turn out one product, the tendency was toward the specialization and serialization of machines. The work to be done was considered as a mechanical problem, split up into its separate and constituent elements, with a series of machines for the different processes. The work “flowed” from operation to operation and from machine to machine; neither the worker nor the machine was the decisive consideration but the work itself and its increasingly mechanical and automatic performance. These technical developments were accompanied by the steady growth of mass production, with intensive specialization and serialization involving the use of. considerable auxiliary appliances, particularly the automatic conveyor.

Technical-economic progress after the 1850’s resulted in a constantly greater investment of capital; in American manufactures it amounted to $533 million in 1849 and $9,813 million in 1899. Capital investment per worker rose from $557 to $1,840 and output per worker from $1,065 to $2,450. The number of workers rose from 957,000 to 5,306,000, an increase of 454%, compared with 1,741% in capital and 1,043% in output. [13] Hence, although labor was relatively displaced on a large scale by the higher composition of capital, there was no absolute displacement because production tended to rise more than the productivity of labor. In addition, millions of workers were absorbed by the tremendous growth of transportation, construction, and agriculture, a direct result of the inner continental areas (the American equivalent of Europe’s overseas markets) [7*], whose development, moreover, provided a vast internal market for consumption goods. Accumulation of capital, the making of profits and their conversion into capital, was extremely active. Not only did production rise more than productivity, but the output of capital goods was constantly and greatly augmented, absorbing relatively more workers than the industries producing consumption goods.

All these conditions checked the tendency toward the creation of an overlarge and threatening surplus population, in spite of the increase in normal and cyclical unemployment. But the significant thing is that a surplus population did appear: for it was practically non-existent before the Civil War (except in its cyclical aspects), when technical-economic changes were slow, industrialism was only acquiring momentum, and the new lands of the frontier offered more possibilities of escape than after the 1870’s. Unlike England, moreover, the American industrial revolution and the upswing of capitalism measurably coincided in time, the conditions of one modifying those of the other. Not only did a surplus population arise, it was greater than in the industrial nations of Europe. Cyclical and normal, including technological, unemployment was an increasing torment to the workers, an important cause of the labor discontent and struggles of the 1870’s-90’s. The large surplus population did not create more unrest and militant action because its composition was repeatedly changed by immigration; only in depression was there prolonged unemployment among the same groups of workers.

American technological progress was unparalleled in both its inventive and practical aspects. Where an invention or discovery was European in origin (railroads, the dynamo), it was developed most highly and applied most generally in the United States. Almost everywhere the urge was to let mechanical equipment do the work, to scrap the old and accept the new. Not only that: as industry tended to adopt the most efficient equipment, so machinery tended to conform strictly to mechanical requirements, to become completely functional. The engineering approach was interlocked with an important element of American life, the spirit of being practical, experimental, even revolutionary in a limited empirical sense. Technological progress was hampered by the profit motive, it had a crude, devastating effect on culture; but that was the result of capitalist relations, for technology is the liberator of man and the basis of a new, human culture. The urge for increasing technological efficiency marked the upswing of capitalism; its decline is marked by a revolt against technology, by proposals for a “moratorium” on invention.

The unparalleled progress of American technology was conditioned by three basic social-economic factors:

1. The relative insignificance of tradition, resulting in a “pure” capitalist ideology (except in the slave-owning South). There were few vested interests, especially of a feudal character, to hamper technology and industrialization. The European farmer was conservative, still partly in the clutch of an older ideology and mode of living; the American farmer was as practical as the capitalist, unusually eager for technological change. In Europe the industrial revolution had to struggle and move slowly against traditional, class, and political opposition; in the United States it swept onward practically unopposed, building, in addition, upon the pioneer work of other nations. The social atmosphere favored the engineering approach of the new technology.
2. Under capitalism, technological progress depends upon the making of profits and their conversion into capital. This, in turn, depends upon the scale of production and the output of capital goods. Both were tremendously augmented by development of the great mass markets of the inner continental areas, much more than in the case of Europe, with its dependence upon foreign markets. The use of many machines, unprofitable in other countries, was made possible by the greater American scale of production and the more active accumulation of capital. (Yet there was excess capacity and capital investment rose more than output, making necessary an increasing capital investment to produce a unit of product.) American capitalism imposed the fewest economic limitations upon the development of technology.
3. The comparatively high level of American wages encouraged the introduction of wage-saving machinery. (This, and not labor-saving, is the real objective of machinery under capitalism; for while it saves labor, this becomes a saving on wages accompanied by intensification of labor. Only socialism can realize fully the inherent labor-saving function of machinery.) The high level of wages was not a result of capitalist development but a colonial heritage, which capitalist production tried to break down; the differences between American and European wages were relatively about the same in the nineteenth century as in earlier periods. Colonial governors denounced the “intolerable” wages and the “exorbitant” demands of the workers. Governor Winthrop, of the Massachusetts Bay Colony, observed in 1633 that the “excessive” rates asked by workers had given rise to “general complaint” and urged legislative action. [14] The policy was to beat down wages. Maximum-wage laws were passed, to force workers to work for lower pay. Indentured labor and Negro slaves were imported. But only slavery was partly successful; the other measures failed. There was a scarcity of labor in general and of craftsmen in particular; land being abundant, cultivation paid better than work at low wages. The factory system, early in the nineteenth century, again tried to lower the level of wages. Women and children, often mere babes from the almshouses, were employed in preference to men. One textile manufacturer, commenting on the economy of the new machinery 2nd water power, wrote: “We got rid of 60 weavers, and substituted for them 30 girls, who were easily managed and did more and better work.” [15] But the opportunity of becoming an independent farmer on the new lands of the frontier created an income norm around which wages tended to fluctuate, and much below which they could not permanently fall. Thus historical elements (and they are important in wage determination) maintained American wages, low as they were, at levels generally higher than the European. The necessity of wage-saving stimulated technological progress.

The onward sweep of technical-economic change destroyed the rule of the old middle class, dominated by the commercial and agrarian bourgeoisie, the merchants and large landowners. Economic and political power was usurped by the industrial capitalist. But the development of large-scale industry, with its increasing capital needs and constantly higher composition of capital, meant the decay of the class of small industrial producers, who were either wiped out or subordinated by the concentration and trustification of industry. This in turn produced another change within the ruling class. As industry, with its growing capital needs, raked in the savings of smaller investors, and was more and more trustified, the multiplication of stockholders separated ownership, management, and control. Management was vested in managerial employees; control was usurped by financial capitalists, the masters of monopoly capitalism, an oligarchy operating through the institutional mechanism of the great banks. This development, which appeared in the 1870’s, was ascendant by 1900 and completely triumphant twenty years later. Its basis was the technological transformation of industry, out of which arose industrial concentration and monopoly and the centralization of financial control.

There were important changes also in the other classes. All persons engaged in agriculture, although scoring an absolute increase, fell from 52.8% of the gainfully occupied in 1870 to 35.9% in 1900. The wage-workers, more and more a class of unskilled or semi-skilled workers, became an increasingly larger proportion of the gainfully occupied. “White collar” occupations made the largest relative gains. Technicians increased from 8,000 in 1870 to 102,000 in 1900, clerks and stenographers from 148,000 to 499,000, salespeople and clerks in stores from 105,000 to 811,000, with an increase of 60% in the number of persons in professional occupations. [16] There was a similar growth in the managerial and merchandising employees of corporate industry. This is a general tendency of capitalist production; in England, from 1861 to 1891, the number of the gainfully occupied rose 100%, with a rise of nearly 200%, however, in clerks, brokers, agents, and salesmen. [17] Although the small producer was becoming relatively unimportant in the shadow of trustified industry, a “new” middle class was shaping itself. It was new, however, only in the sense of inner proportional changes; for its elements were old – professionals, technicians, brokers, merchandising employees, storekeepers, salesmen, and agents. The newest and most important element were the managerial employees in corporate industry, made necessary by trustification and the separation of ownership and management, once the combined function of the industrial capitalist.

The later stages of the upswing of capitalism, from the 1890’s on, were marked by the increasing use of electric and oil power in industry, especially the former. This coincided, in Europe, with the pre-war beginnings of decline, which would have been much more severe if not for the stimulus of electric power to the output of capital goods. In the post-war period the decline of capitalism in Europe was accelerated in spite of the expansion in electric power; only in the United States, in 1923-29, was it a factor in a new upsurge of prosperity. Now electrical expansion, comparable only to the railroads in the demand it created for capital goods, is practically at an end. [8*]

As in the case of the steam engine, the development of new sources of power profoundly influenced the structure and operation of machines and the character of the labor force. The limitations of steam power were broken by the electric motor and the internal combustion engine.

Agricultural machinery was especially influenced by the oil engine. Steam power had been used to pull plows on large farms, but the results were unsatisfactory. The new oil engine was early adapted to the use of agricultural machinery; with its improvement and the construction of light, general-purpose tractors, the way was opened for the growing use of motor power on farms and their intensive mechanization. The tractor forced modifications of the older agricultural machinery and the development of many new implements; the tendency is toward the universal machine with interchangeable implements. The tractor is adapted to the performance of all sorts of farm work; it can now be used both for small farms and for hilly, stony, and boggy soils. Efficiency was increased, particularly during and after the World War, but this tended to multiply the farmers’ burdens. Larger capital needs meant more mortgages and interest payments. Larger output saturated markets and lowered prices, aggravating the permanent agricultural crisis. As productive efficiency (stimulated also by more progress in soil fertilization and plant breeding) increased more than output, labor was displaced and a surplus farm population created.

In industry, electric power not only accelerated mechanization but greatly augmented the automatic character of machinery and its displacement of labor, emphasized by the increasing use of chemistry and apparatus as means of production. Electric drive changed the early transmitting mechanism of belts, shafts, and pulleys. Individual drive with a motor for each machine made possible the most logical arrangement of machinery, of prime importance in serialization and mass production. The conveyor system depends upon the electric motor. Motors were designed and constructed for the needs of particular machines; finally the motor itself was made an integral part of the machine, which increasingly became an electrical mechanism. In rayon plants there are spinning frames on which every spindle is driven by its own motor, far outstripping the older mechanical spindles; electrification has made rayon production practically automatic in all its varied stages. All machines are virtually automatic in the silk industry, with the exception of reeling, in which the operator still performs a large part of the work. In rolling mills, the electrification of main-roll drive and controls has resulted in automatic continuous operation. In blast furnaces and power plants coal is automatically stoked; the stokers are replaced by “combustion engineers” who supervise control dials. The electric teletypesetter, using a worker no more skilled than an ordinary typist, displaces compositors with perforated cards which are attached to the linotypes and operated automatically; and the rolls may, by radio, be sent from a central point to any number of plants. A photoelectric device sets type automatically direct from typewritten copy. Non-factory work is marked by similar developments; in open pit mining an electric shovel digs enough dirt in twenty-four hours to fill 7,500 motor trucks. [18] While in some cases the tendency is toward the one-job machine, in others it is toward the multiple automatic combining operations formerly performed by separate machines. A modern drilling machine performs 132 operations. An automatic monster makes complete automobile frames in one plant. In a paint factory the raw materials are fed into the machine and move mechanically from one process to another until the filled and sealed cans arrive at the shipping floor. [19] Auxiliary appliances also become constantly more automatic, operated with electric, pneumatic, or hydraulic power. There are machines which count 25,000 pieces to the ounce and others which count tons of heavier pieces. Electric devices, often within the machine itself, increasingly control precision and quality. Industry is multiplying its automatic thermostats, automatic mixing devices, and more highly accurate gauges. In steel, aluminum, and pulp-paper mills, temperatures and pressures are under electric control; in an electric heater for forgings a photoelectric cell passes the heated billet on when it reaches the right temperature, eliminating overheating, which weakens the metal, and underheating, which breaks the die; an electric machine inspects the surface of quality products and discards those with defects. [20] The levers and push-buttons, which control the operation of automatic machines and apparatus, find their highest expression in remote control and the automatic plant. Control appliances are concentrated on switchboards in a “cabin” at some central point; a few workers, each attending one or more switchboards and dials, control the plant’s automatic operation. The plant becomes almost manless. In some hydroelectric plants there is not a single worker; reports are made and control is exercised through automatic electric devices.

The photoelectric cell, or “electric eye,” has become a most powerful factor in the fuller realization of the automatic principle. “An unusual variety of uses has been found for this mechanical eye, which never knows fatigue, is marvellously swift and accurate, can see with invisible light, and coordinates with all the resources of electricity. It sorts beans, fruit, and eggs, measures illumination in studios and theatres, appraises color better than the human eye, classifies minerals, counts bills and throws out counterfeits, counts people and vehicles, determines thickness and transparency of cloth, detects and measures strains in glass, sees through fog, is indispensable in facsimile telegraphy, television, and sound-on-film pictures, directs traffic automatically, and serves as an automatic train control.” [21] Electricity functions as power, regulates precision and quality, and makes possible the remote control of automatic machinery, apparatus, and plants. It is also used more constantly in chemical processes, in the creation of alloys and of synthetic materials and products, which has, moreover, only begun. Modern industry depends upon electricity and chemistry; and both make for an increasingly automatic performance of work by the more purposive application of science.

Automatic machines and apparatus and the automatic plant, fully realizing the principle inherent in mechanical work, are completing the revolution in the relations between labor and production. The mechanical equipment not only absorbs skill but labor itself; it no longer merely displaces workers by performing their function more efficiently but absorbs the function itself. There is a change both in the relations of labor and in the character of labor.

In the handicraft system, all labor was skilled, whether it was the artisan working on machines and appliances or the craftsman working directly on raw material, or a combination o both types of labor. All-around skilled labor was the basis of production.

In the early factory and in the earlier stages of the industrial revolution, unskilled workers appeared and became increasingly numerous. It was the dominant type of labor, although more and more machinists or mechanics were necessary to superintend the machinery. The division and specialization of labor was the basis of production.

In the later stages of industrialism, with its large-scale industry and more efficient and skill-absorbing equipment, the tendency was to make the mass of workers semi-skilled. The need was neither for highly skilled nor wholly unskilled labor, but for workers whose partial skills were easily acquired. Relatively fewer mechanics were needed to superintend the more efficient machines and apparatus. (At the same time a new class of mechanics arose, such as locomotive engineers, linotype operators, and electricians.) The division and specialization of both labor and increasingly automatic mechanical equipment are the basis of production. [9*]

This third stage is still the predominant one. But a fourth stage has already definitely appeared, although limited to the more highly developed industries and plants. Complete automatic production transforms the labor force into a small group of skilled supervisors and repairmen. “The development of more automatic machinery requires the ‘key’ man, a new and higher type of mechanic, the junior technician. Labor formerly unskilled becomes highly technical; thus the occupation of stoker – traditionally the lowest – gave way to that of the junior technician who operates the boilers by tending a gauge ... All types of automatic machinery demand the services either of the mechanic or of the junior technician.” [22] The modern mechanic and the junior technician need almost as much technical knowledge as engineers; they can, at a pinch and temporarily, replace the engineers. The division and specialization of automatic mechanical equipment becomes the basis of production.

Not only labor but management also is profoundly affected by mechanization and automatic production. One-man management is in the discard. Managerial functions are simplified, specialized, and mechanized, and need increasingly smaller skill to perform. Managerial skill and labor are transferred to mechanical devices. In automatic plants only a thin line divides managerial and ordinary work: management itself tends to become an automatic mechanical function.

Of the utmost cultural importance is the tendency of highly developed technology to break down the division of labor between worker and worker and management and the workers. The worker’s new requirements of “mental alertness, general intelligence, ‘polytechnic literacy’ and loyal dependability” make him, according to one observant management engineer, “more and more an intelligent human being, an all-around educated man, defining ‘educated men’ as ‘those who can do everything that others do.’ This transition in the functional characteristics of workers is slowly but surely obliterating not only the ‘division of labor’ ... but it is also steadily abolishing the distinction between the ‘man in overalls’ and the ‘white collar man’.” [23] Thus technology itself confirms one of the most derided “utopian” ideas of Marx, who, fifty years ago, wrote of the “higher phase of communist society, after the enslaving subordination of individuals to the division of labor and with it also the antagonism between manual and intellectual labor have disappeared, after labor has become not merely a means to live but is itself the first necessity of living.” [24] Obliteration of the division of labor, which means that division and specialization of “labor” increasingly becomes a function of the mechanical equipment, is now merely a tendency. Its fulfillment presupposes a constantly greater development of the forces of technology; but this multiplies the contradictions and antagonisms of capitalist production, and there is, consequently, a growing revolt against and limitation of technological progress. It presupposes, moreover, definite social-economic conditions. The cleavage between town and country must be ended by the socialization of agriculture and its combination with industrial production, the liberation of industry, made possible by electric power, from the fetters of geographical concentration. (Capitalism uses only slightly the opportunity to decentralize industry: too many vested interests are menaced. The Henry Ford idea of “combining” industry and agriculture means simply that workers, after their labor in the factory, are to “farm” vegetable gardens to supplement insufficient wages; the real farmers, of course, would suffer from the lower demand.) There must be, and this is wholly possible, a mass participation in higher learning. Out of these conditions will arise the new ideology of stressing the dignity of work, and not its forms ...

While the technology conditioned by electricity means partly “a different kind of machine,” it does not mean “a different kind of social relations,” [25] does not change the fundamental social-economic relations of capitalist production. [10*] Electricity, technologically, has induced many qualitative changes in the machinery, apparatus, and chemical processes of production; and without it remote control would be impossible. But economically, the changes are merely quantitative; electricity realizes more fully the inherent automatic principle of machinery, and, by tremendously increasing the productivity of labor, aggravates the antagonism between production and consumption and multiplies the strains and stresses of capitalist industry. Thus the newer electric technology is an accelerating agent, as were all former great technological changes. But this acceleration is the more significant because of an economic change: in the epoch of the upswing of capitalism the curve of production was upward, now it is downward. The threefold results are an expression of the general crisis and decline of capitalism:

• The rate of increase in production is smaller (where it is not minus) than in the productivity of labor.
• The displacement of labor becomes absolute; where formerly the industries producing capital goods absorbed relatively more workers than the consumption goods industries, now they displace more workers.
• The tendency for capital claims to increase faster than production becomes more marked.

Capital claims, profits, and interest in 1923-29 grew at a faster rate than production (Table V), much faster than in former years. This is particularly evident in new capital investment, which rose 36.1% compared with 20.6% in production. While the growth of capital claims always outstrips production, this becomes more marked as capitalism approaches maturity and decline. Much of the higher productivity of labor represented no new capital investment; but the composition of capital, nevertheless, was increasingly higher, and, because of excess capacity and the tendency of the rate of profit to fall, a constantly greater capital investment was necessary to produce a unit of product. Capital claims, moreover, do not arise only out of investment in production, but out of “investment” in mere claims upon production. This tendency was sharpened in 1923-29, because the increasingly speculative character of industry multiplied capital claims regardless of production. The marvels of technology enlarge the wholly predatory superstructure of production, a decisive aspect of monopoly capitalism.

Corporate debts increased nearly as much as other forms of capital claims. To make this the causal factor in “unbalancing” the economic system is a total misunderstanding of the facts, where it is not mere apologetics. Debt is itself a capital claim. It can be separated only in a functional sense, not on principle. The debt of industrial corporations is an expression of the constantly greater capital investment needed to produce a unit of product, of the excess capacity and intensified competition which force down the rate of profit and result in deficits and borrowing. The debt of non-industrial corporations, and most of their non-debt capital, represents mere claims upon production. Pressure of surplus capital, the outcome of capital, profits, and interest increasing more than production, multiplies mere “claim” capital, particularly in the form of debt. The debts of the farmers represent an intensification of capitalist exploitation and the permanent agricultural crisis (smaller markets, larger output, and still larger productivity). Thus the increase in debt arises out of the aggravation of basic maladjustments and disturbances in the capitalist economy. It is also evidence of growing parasitism, the “purest” form of which are the world’s enormous government debts. As an element of rigidity in the economic structure, debt is simply one of the many rigid elements in monopoly capitalism – control over output, markets, and prices, and, in depression, interference with the forces of liquidation. All of these elements intensify depression and hamper recovery. Scale down debts or abolish them, and they rise anew; for debt must increase under the conditions of capitalist production.

As capital claims grow faster than production, more pressure is put on capitalist enterprise to “earn” larger profits. Excess capacity and competition are aggravated, including the struggle for foreign markets. Higher profits and interest payments proportionally lower mass purchasing power, and sharpen the antagonism between production and consumption. Wages are slashed or merely maintained: during three of the five years 1924-29, total industrial wages were below 1923, while capital claims, profits, and interest rose. More efficient equipment is introduced and labor displaced. (In the epoch of the upswing of capitalism the introduction of more efficient equipment, and the resulting higher composition of capital, lowered relative wages, but total and average wages rose because of the increase in production and markets. Under the conditions of capitalist decline, however, the tendency is for new equipment to result in lower total and average wages, as the great costs of the newer machines and apparatus become relatively still greater because production and markets are restricted and the costs of excess capacity rise.)

Higher capital claims and labor displacement are interlocked. Displacement is most significant in the industries producing capital goods, upon which capitalist production depends (Table VI). Up to 1919 these industries absorbed an increasingly large number of workers, relatively more than the industries producing consumption goods. That meant an upswing of capitalism, an increasing output and absorption of capital goods. It meant also an offset to the displacement of workers by the rising productivity of labor. But the rate of absorption of workers in capital goods industries slowed down considerably from 1914 to 1919, with the rate thereafter changing to one of displacement. The number of capital goods workers rose from 3,777,000 in 1914 to 4,348,000 in 1929, an increase of only 15%; but the increase in fact was much smaller because the one was a year of depression and the other one of prosperity.[11*] While the statistics indicate that the rate of absorption was at a standstill in 1919-29, it actually became one of displacement; for the decrease in the number of capital goods workers from 4,359,000 to 4,348,000 was small only because the number of construction workers in 1919 was unusually small owing to the war-time drop in building. In 1929 the number of construction workers was below the 1914 level. (In 1914 construction workers represented 39% of all capital goods workers, in 1929 only 32%. This decrease is of extraordinary significance; because of the undeveloped inner continental areas, construction has played a more important part in the American accumulation of capital than elsewhere.) If construction is omitted, the number of capital goods workers fell from 3,281,000 in 1919 to 2,948,000 in 1929. The loss was wholly in transport equipment and mining, but with employment stationary, although labor was relatively displaced, in the other industries. These other industries in the past absorbed increasingly more workers and the production of transport equipment was for a time the most important element in the accumulation of capital; its displacement of labor is an expression of the exhaustion of the long-time factors of expansion in transportation, offset only in small part by the motor truck.

In the epoch of the upswing of capitalism the number of industrial workers grew constantly. In particular, the capital goods industries absorbed more workers than the industries producing consumption goods; but now they displace more workers. In manufactures, in 1919-29, the decrease in capital goods workers was 300,000 or 10%, in consumption goods workers 138,000 or 2%. This complete reversal of previous trends took place when the American economy was still on the upswing, although the rate of expansion was downward; it now becomes the creator of an increasing surplus population of unemployed and unemployable workers. For it not only means that the productivity of labor is rising more than production, but that technological displacement of workers is aggravated by the downward movement of production, particularly in capital goods.

Some urge “control” of the machine. But since the machine acts as it does only because of the social-economic relations of capitalist production, control is possible only when socialism abolishes private property and profit. The Cigar Makers International Union, supported by William Green, urges legislation to tax employers to contribute “toward the relief of the displaced employees until such time as they may be absorbed elsewhere.” [26] This proposal might have been of some value in the epoch of the upswing of capitalism, when absorption was greater than displacement. But now, with permanent displacement on a mass scale? It means poor relief.

Others urge a revolt against the machine. Either “down with machines” or a “moratorium” on the introduction of new machines. (Many NRA codes forbid the introduction of new machinery unless first approved by the code authorities.) That is revolt against the increasing purposive application of science, against all the possibilities of plenty, leisure, and culture inherent in technology if freed of its capitalist fetters. These possibilities might be measurably realized by mere use of existing equipment. The efficiency of this equipment, moreover, is very uneven; in blast furnaces the range of production is from 145 tons per 1000 man-hours to 1,313 tons, and in petroleum refineries from 633 barrels to 141,829 barrels. [27] Thus productive efficiency, and the mass of goods and services, might be greatly augmented by raising all industry to the level of the most efficient existing equipment. But still greater are the possibilities of technological progress, and of plenty and leisure for all. “Our chemical techniques and manufacturing processes,” in the opinion of Prof. Richard Willstaetter, Nobel Prize winner in chemistry, “are usually drastic and crude, resembling forces of the inorganic rather than of the organic world. It is our task to appropriate more and more the delicate methods of the living cell, where reactions proceed at normal temperatures and pressures, with mild reagents, and with the most subtle catalysts.” [28] And when American scientists produced in furnaces metals which occur rarely in nature and which are indistinguishable from the natural product, the scientific comment was: “It is impossible to say when the theory of to-day will become the practice of to-morrow.” [29] Yet both research and its application are being restricted by capitalist decline. Only the Soviet Union offers an unlimited opportunity for science and its technological application, freed of capitalist fetters.

But the technological basis of capitalism is a force which perpetually changes the material relations of production. [12*] Decline will limit the progress of technology, but will not stop it. (The greatest technological advance will be made in armaments, increasing their powers of destruction.) In the midst of the greatest depression in history there was technological improvement, an increase in the productivity of labor. This limited progress will not realize the full possibilities of science. But it will aggravate economic maladjustments and disturbances; for technological improvements will proceed even more haphazardly and unevenly than in the past. And a smaller rate of technological change than formerly will be more disturbing because of the downward movement of production and the absolute displacement of labor.

The resulting surplus population is composed mainly of workers. But it includes other elements of the population, who also feel the pressure of capitalist decline.

From 1919 to 1929, large numbers of farmers and farm workers were displaced, at least 500,000. The main factor was increasing productive efficiency, as the markets for agricultural products were virtually constant. The government’s “farm relief” program accelerated displacement and augments the agricultural surplus population. Thus R.G. Tugwell, Assistant Secretary of Agriculture, says: “We must study and classify American soil, taking out of production not just one part of a field or farm, but whole farms, whole ridges, perhaps whole regions ... It has been estimated that when lands now unfit to till are removed from cultivation, something around 2,000,000 persons who now farm will have to be absorbed by other occupations.” [30] But these “other occupations” are also displacing workers who must find other work. Moreover, if all farms used the most efficient methods, the displacement would be even larger than the 2,000,000 envisaged by Tugwell. The movement for “subsistence farms” means simply a desperate evasion of the problem and a lowering of living standards. If large-scale farming grows, it will intensify, because of constant markets, the economic pressure on the smaller farmers, displacing them or lowering their income. The American farmers are steadily becoming peasants, with many of them thrown into the surplus population.

Clerical workers are also swelling the surplus population. The number of “salaried employees” in manufactures fell from 1,447,000 in 1919 to 1,358,000 in 1929 [31], a loss of 6.1% (compared with 1.8% among wage-workers). But the loss was actually greater, as the figures include managerial employees and officers, whose numbers increased. The modern office, with its array of machines and appliances, resembles a factory. There is increasing mechanization, transfer of skill, and division of labor. Clerks, statisticians, and bookkeepers are replaced by machines tended largely by semi-skilled workers. Many of the machines are automatic. Mechanization lagged in office work; its speeding-up resulted in a displacement of clerical workers greater than among wage-workers.

From 1919 to 1929, the number of technical workers increased much faster than the demand. Already before the depression it was hard for graduates of technical schools to find jobs; it is becoming harder. Technicians are scourged by permanent unemployment. The situation in Germany is characteristic, if most acute; in 1930, according to one professor of engineering, only 20% of technical graduates got jobs, another 10% continued studying, 20% took any kind of job, and 50% were wholly unemployed. And the only suggestion the professor has is this: “Is it not time to put a stop to this mass striving for higher learning?” [32] (That is exactly what fascism is doing, with a similar trend in non-fascist countries: one of the most suggestive aspects of the decline of capitalism.)

Most clerical and technical workers have been pushed down to the occupational level of wage-workers. In the earlier stages of capitalism the clerical worker was measurably a “higher” employee, in the confidence of the employer, considering himself in the same class. The technician, who originated in the master mechanics of the early factory system, was made a member of the “free” professions by the technological transformation of industry; now he is practically a wage-worker, in many cases earning less than the organized skilled workers. Yet these “white collar” workers still cling in large measure to the elder ideology, still consider themselves apart from the working class. This is true also of the non-industrial “free” professions, although many of their members are employees either of corporations or public institutions. All of these groups are heavily represented in the surplus population. In January 1934 of 25,127 “white collar” workers on Civil Works Service relief payrolls, 6,240 were professionals: 1,841 teachers, 763 doctors, dentists and nurses, 632 engineers, chemists, architects and draftsmen, and hundreds of musicians, artists, sculptors, actors, librarians, cartographers, botanists, geologists, research workers, statisticians and translators. [33] The “new” middle class is being rapidly proletarianized, thrown into the surplus population.

The surplus population not only grows quantitatively, it also changes qualitatively. In the epoch of the upswing of capitalism the surplus population grew slowly; it was essentially a labor reserve, facilitating the expansion of capitalist production. In the epoch of decline, however, the rapidly growing surplus population ceases being a mere labor reserve; it restricts the production of surplus value and profits and threatens capitalist domination.

Increasing unemployment means a decrease in the number of workers producing surplus value, whose realized form is profit. “Profit comes, not from a diminishing of the labor employed, but from a diminishing of the labor paid for.” [34] This is bound up with a basic contradiction of the capitalist mode of production: “The workers as buyers of commodities are important for the market. But as sellers of their own commodity – labor power – capitalist society tends to depress them to the lowest price.” [35] Consumption is necessary to production; but capitalism limits the wages and consumption of the workers, thus creating cyclical crises and breakdowns. Another form of the contradiction: capitalist production depends upon the workers, upon the living labor which yields surplus value and profit; but capitalism tends to displace workers. In the epoch of the upswing of capitalism the displacement was relative; the increase in the number of workers meant an increase in the mass of surplus value and profit, which checked the tendency of the rate of profit to fall. Now absolute displacement of workers on a constantly greater scale means a decrease in the mass of surplus value and profit. Unemployed workers do not produce surplus value. Neither do they consume, or they consume very little. The mass of surplus value shrinks, in spite of a rise in the rate, as the mass of workers shrinks. And markets shrink as the workers consume less. Excess capacity rises and the rate of profit falls. For machines neither produce surplus value nor do they consume. The one is necessary to yield profit, the other to sustain production. These are the conditions which exist in depression, and they become chronic in the epoch of decline. Thus the surplus population threatens the economic foundations of capitalism.

It also threatens capitalism politically. Mass disemployment is potential with revolution. Unemployed workers must be fed (as niggardly, of course, as possible) to prevent revolt. This means a drain upon the wages of employed workers; it also means a drain upon profits in the form of higher taxes, as long as there is the fear or possibility of action by the workers. By every means in its power, however, the capitalist class attempts to throw all the burdens of disemployment and decline upon the workers; where “democratic” means fail, it resorts to fascism. Social disturbances become social upheavals. Capitalist monopoly tightens its grip upon industry, the capitalist oligarchy its grip upon society and government. The resort to war becomes more possible and more frightful. Technology, although limited in its progress and because of it, creates new economic maladjustments and disturbances; and it becomes clearer that the capitalist mode of production is wholly relative and historical, that it imposes new fetters upon the technical-economic forces of society. These forces revolt against the fetters imposed upon them, they thrust forth the need for new social relations of production. As mass standards of living fall and mass misery grows, the struggles of the workers take on new and higher forms, attracting other exploited elements. For while, in the words of Marx, there is “an increase in the mass of misery, oppression, enslavement, degradation and exploitation,” with this “grows the wrath of the working class, a class always growing in numbers, and disciplined, united, organized by the very mechanism of capitalist production itself. The monopoly of capital becomes a fetter upon the mode of production which has flourished with it and under it. The centralization of the means of production and the socialization of labor reach a point where they are incompatible with their capitalist husk. This is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.” [36]

 
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Footnotes

1*. “Technology reveals man’s dealings with nature, discloses the direct productive activities of his life, thus throwing light upon social relations and the resultant mental conceptions ... Primarily, labor is a process going on between man and nature, a process in which man, through his own activity, initiates, regulates and controls the material reactions between himself and nature. He confronts nature as one of her own forces, setting in motion arms and legs, head and hands, in order to appropriate nature’s productions in a form suitable to his own wants. By thus acting on the external world and changing it, he at the same time changes his own nature. He develops the potentialities that slumber within him, and subjects these inner forces to his own control ... The labor process ends in the creation of something which, when the process began, already existed in the worker’s imagination, already existed in an ideal form. What happens is, not merely that the worker brings about a change of form in natural objects; at the same time, in the nature that exists apart from himself, he realizes his own purpose, the purpose which gives the law to his activities, the purpose to which he has to subordinate his own will ... He makes use of the mechanical, physical and chemical properties of things as means of exerting power over other things, and in order to make these other things subservient to his aims ... Thus nature becomes an instrument of his activities with which he supplements his own bodily organs, adding a cubit and more to his stature, Scripture notwithstanding.” Karl Marx, Capital, v.I, pp.169-71, 393.

2*. The expropriation of peasants from the soil, by means of enclosures of the land and with fire and sword, was particularly severe in England; but in other countries also it was a factor in creating a mass of propertiless and helpless workers for the use of capitalist enterprise. Dissolution of the monasteries, innumerable wars, and disruptions of the guilds increased the number of beggars, orphans, and adventurers; many of these were driven into factories or forced to work, unpaid, on the construction of roads by savage decrees of the absolute monarchy. There was no expropriation of peasants from the soil in the North American colonies, where land was abundant and free; indentured labor was secured from helpless colonial orphans and from the mass of unfortunates in England, but its conditions, while bad enough, were better than in Europe.

3*. For some years, research students have been trying to disprove that the industrial revolution produced a surplus population and increasing misery from, say, 1750 on. But this represents the necessity for being “original,” where it is not sheer apologetics. Conditions were, of course, not so bad in the United States prior to the Civil War, a most important peculiarity in shaping American social development in general and the labor movement in particular. The factory system expropriated the crafts of the artisans and preferred to employ women, children, and orphans. But this development proceeded on a small scale, because industrialization was slow; and wages were relatively high, a colonial heritage which persisted because, owing to continued existence of the free lands of the frontier, wages tended to approximate the level of the farmers’ income. Under frontier conditions a surplus population, except in depressions, could not arise; any surplus was absorbed in the westward migrations.

4*. The downward curve of demand for new transportation equipment is one of the elements of the decline of capitalism. Shipbuilding has been one of the most depressed industries since the World War. The motor truck and airplane, among the most important of recent technological creations, have been economically insufficient to offset the decrease in railroad construction. Yet the world’s transportation net is incomplete, and there is abundant need for railroads, motor trucks, and airplanes in economically backward countries. But these countries, under imperialist exploitation and caught in the whirlpool of capitalist decline, are unable to develop their economic possibilities. Their expansion or retrogression is interlocked with that of world capitalism.

5*. Intensive industrialization in the Soviet Union is not accompanied by unemployment. Henry Hazlitt, These Economic Experiments, American Mercury, February 1934, pp.141-42, says: “There is nothing particularly remarkable about an absence of unemployment under any social system when an agricultural country is being rapidly industrialized.” Isn’t there? All through the nineteenth century, unemployment was widespread in agricultural countries being industrialized. But perhaps Hazlitt stresses the “rapidly.” Nowhere was industrialization more rapid than in the United States from 1860 to 1900. Yet cyclical unemployment was greater than in earlier depressions. Technological and normal unemployment both increased, and was higher than in other countries. According to the Douglas estimates, unemployment in manufactures, building trades, and transportation rose from 5.6% in 1889 to 7% in 1899. In countries being industrialized to-day, unemployment moves in about the same manner as in the more highly industrial countries. Trade union unemployment in Australia was 7% in 1927, 11.1% in 1929, and 29.4% in 1932; in Canada, for the same years, it was 4.9%, 5.7%, and 22%. (International Labour Review, June 1933, p.809.) The implication of Hazlitt’s statement, moreover, is that unemployment must exist where industrialization is not “rapid” or is measurably complete. But why, if not for the social relations of capitalist production? Industrialization in the Soviet Union, in comparison with capitalist countries, is marked by a qualitative difference: a socialist planned economy, where production for use and not for profit is the motive.

6*. The organized glass manufacturers of Europe prevented, for many years, the introduction of the Owens machine because it was unprofitable. This is another illustration of how social-economic relations condition technology, as the machine was profitable in the United States because of the high wages of glassmaking craftsmen and the existence of large markets which made economical large-scale production possible. It also illustrates how capitalist interests retard technological progress. In the United States as well many machines were not used because they were unprofitable, although socially useful and desirable.

7*. It must not be assumed that foreign trade was not an important factor in American economic development. It was. The United States, in spite of its peculiarities, was inseparably bound up with the world market. Agriculture exported its surplus to Europe, without which its expansion would have been limited. Capital, raw materials, and manufactures were imported, accelerating industrial development. After the 1870’s, the American scale of production was enlarged by an increasing cultivation of export markets, particularly for textiles, meats, boots and shoes, petroleum, and metal products, including agricultural and other machinery.

8*. The period after the 1890’s was marked, because of the increasingly higher composition of capital and keener competition, by more downward pressure on the rate of profit. Capitalists sought eagerly for methods to raise the productivity of labor and the rate of surplus value without the costs of investment in more efficient equipment. The answer was Taylorism, or scientific management, whose basic element is improving the efficiency of labor in terms of labor itself. This still means a higher composition of capital, for fewer but more efficient workers set in motion the same quantity of fixed capital and a larger quantity of raw materials. But the higher productivity of labor is not compensated by an increase in the output of capital goods. Scientific management made enormous strides in 1922-29. It makes still greater strides under the conditions of capitalist decline. But scientific management means an absolute displacement of labor and lower total wages.

9*. All these developments involve a tremendous socialization of production, in the form of large-scale industry. It also involves a socialization of invention, for all large industrial corporations have highly organized and efficient laboratories employing hired “inventors” who systematically develop new technological applications of science.

10*. A group of engineering mystics, the Technocrats, worship at the shrine of Power. They forget that power does not function in emptiness, that it needs machines, apparatus, and labor, and that all the factors are conditioned by social-economic relations. From 1860 to 1890, the productivity of labor increased more than the consumption of power, because machinery increasingly supplanted manual labor. From 1890 to 1914, the consumption of power increased more than productivity, because there were no fundamental changes in machinery. From 1919 to 1929, productivity increased more than power consumption, because, primarily, of an essentially new type of machine. In terms of electric power, the electrification of American manufactures rose from 5% in 1899 to 56% in 1919, with a very small increase in the productivity of labor; it rose to 82% in 1929, a smaller rate of growth accompanied by a great increase in productivity. (Census of Manufactures, 1929, v.I, p.112.) The greater increase in the productivity of labor in 1919-29 was primarily the result, not of electric power in itself, but of the development of the electrical machine and of electrochemistry. In 1899-1919, electricity, by and large, was merely used to replace steam power in driving old types of machinery. Moreover, productivity in 1919-29 was increased by changes in the organization of labor, by the more scientific utilization of raw materials and their wastes, and by the increasing use of synthetic materials (in the creation of which chemistry is as important as electricity). While horsepower per wage-worker rose 54% in 1899-1919, it rose only 49% in 1919-29. Manufactures in 1929 used less than 6% of installed horsepower; 80% was used in buses and automobiles, 90% of it under the hoods of pleasure cars. (C.J. Hirshfeld, Power, Toward Civilization, pp.74-75.) The use of power in automobiles and the home undoubtedly has a profound influence on social life, but not directly on production (except in demand for goods), and production is basic. Price spoils the promise of power, say the Technocrats, in the manner of the most doctrinaire price economists. But price is only one element in the capitalist mechanism, and not the most basic; price in the Soviet Union exists without the disturbances characteristic of the capitalist economy. And do they think they can tinker with price relations without abolition of private property and profit? The Technocrats’ power-mysticism makes them speak of “ergs” and “energy money” as a medium of exchange. This is sheer technological idolatry. It forgets that at every point in the productive process you meet human labor, either living labor in the form of workers or dead labor in the form of the means of production. This is recognized by two engineers, L.P. Alford and J.E. Hannum, who urge that production be measured by a time-rate based on 1,000 productive manhours, the “kilo man-hour” or kmh: “One hour of human work is the objective equivalent of any other hour of human work, when each hour is averaged from the total number of productive hours worked by the group to which the worker belongs. This is the principle of economic or exchange equality, which must be enforced to stabilize the interchange of goods, articles and services between the members of one producing group and those of any other working group.” (New York Times, February 4, 1934.) The kmh is urged, fantastically, as the basis for capitalist planning; but what is it, in final analysis, but the labor theory of value, which Marx analysed most thoroughly? The amount of socially necessary labor incorporated in a commodity determines its value; this is distorted by capitalist production, and commodities nearly always sell above or below their value (a basic factor in capitalist disturbances), but only changes in the amount of labor incorporated in commodities can explain long-time changes in price.

11*. The slowing down of capital goods production is a world development. The number of workers engaged directly in the manufacture of industrial machinery in England, Germany and France, according to Friedrich Kruspi, Machinery, Industrial, Encyclopedia of the Social Sciences, v.X (1933), p.6, rose from 875,000 in 1913 to 1,037,000 in 1925; in the world as a whole from 1,891,000 to 2,055,000, or only 9%. The increase was almost wholly English, and was due more to the relatively small rise in the productivity of labor than to any considerable rise in output. In all industrial countries, moreover, the number of workers in capital goods industries tended to decrease from 1920 to 1929.

12*. “The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones.” Karl Marx and Friedrich Engels, The Communist Manifesto.

Notes

1. A.P. Usher, A History of Mechanical Inventions (1929), pp.274-76.

2. Walter Rautenstrauch, New York Herald Tribune, December 29, 1932.

3. Usher, A History of Mechanical Inventions, pp.337-40.

4. Karl Marx, Capital, v.I, 396.

5. Marx, Capital, v.I, p.407.

6. Marx, Capital, v.I, p.408.

7. Meredith Givens, Iron and Steel Industry, Encyclopedia of the Social Sciences, v.VIII (1932), p.299.

8. Marx, Capital, v.I, 417-18.

9. Marx, Capital, v.I, p.429.

10. Department of Commerce, Statistical Abstract of the United States, 1904, p.530; 1931, p.420.

11. Herbert Heaton, Industrial Revolution, Encyclopedia of the Social Sciences, v.VIII (1931), p.8.

12. E. Varga, The Decline of Capitalism (1928), pp.39-40; A. Mataré, Werkzeuge, Maschinen und Apparate (1913), pp.89-95.

13. Statistical Abstract, 1923, p.289.

14. United States Bureau of Labor Statistics, History of Wages in the United States (1929), pp.7-10.

15. History of Wages, pp.84-86.

16. R.G. Hurlin and Meredith B. Givens, Shifting Occupational Patterns, Recent Social Trends in the United States, 2 vols. (1933), v.I, pp.281, 284.

17. J.A. Hobson, The Evolution of Modern Capitalism (1912), p.386.

18. Iron Age, October 13, 1932, p.572.

19. Paint Plant Goes Automatic, Business Week, June 11, 1930, p.24.

20. Walter N. Polakov, The Power Age (1933), p.98; Inspection of Surfaces for Minute Defects, Mechanical Engineering, September, 1932, p.647; New York Times, December 7, 1932.

21. W.F. Ogburn and S.C. Gilfillan, The Influence of Invention and Discovery, Recent Social Trends, v.I, p.133.

22. M.H. Hedges, Mechanic, Encyclopedia of the Social Sciences, v.X (1933), p.264.

23. Polakov, Power Age, p.119.

24. Karl Marx, The Gotha Program, p.31.

25. Polakov, Power Age, p.119.

26. New York World-Telegram, November 21, 1933.

27. New York Times, January 12, 1933.

28. New York Times, September 14, 1933.

29. New York Times, December 31, 1932.

30. Webster Powell and Addison T. Cutler, Tightening the Cotton Belt, Harpers, February, 1934, p.308.

31. Department of Commerce, Census of Manufactures, 1929, v.I, p.16.

32. M. Rubinstein, Relations of Science, Technology and Economics Under Capitalism and in the Soviet Union, Science at the Crossroads (1931), p.9.

33. New York Times, February 4, 1934.

34. Marx, Capital, v.I, p.417.

35. Marx, Capital, v.II, p.363.

36. Marx, Capital, v.I, p.846.

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