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Promise of American Production
From Labor Action, Vol. 10 No. 37, 16 September 1946, p. 6.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
One glaring paradox characterizes our capitalist society: it has developed, to a degree never before dreamed of, the means by which to produce the necessities and luxuries for which men yearn and at the same time it has tragically failed to utilize those means in order to provide a decent life for humanity. This paradox is especially true for America, which boasts the most highly developed technology in the world.
Millions now ask the question: If America could produce so quickly and in such vast quantities for war, why then is it not able to do at least as well for constructive peacetime purposes?
In this article and those to follow, we shall not answer this question directly; we shall not here try to explain the workings of capitalist economy which produce the tragic paradox. Rather, our aim will be more modest: to examine a few recent developments in American productivity, to discuss the effects, of war production on the American economic organism and to see what possible effects the recent changes in American productivity will have on the American people.
In no other country has the development of capitalist economy and the increase in productivity reached the degree that it has in America. This economic preponderance of American capitalism was most sharply demonstrated in the war. In 1944 the U.S. outproduced the Axis powers in combat munitions by more than 50 per cent, made over 40 per cent of total armament output of all belligerent nations. This domination in war production merely reflected a general economic superiority.
In recent years, there has been a steady increase in productivity – that is, output per man-hour in a given industry – even though the capitalist system has failed to make the fruits of that increased productivity sufficiently available to the masses. The output per man-hour in manufacturing has more than doubled between 1919 and 1939. In auto, productivity tripled during those years; in oil refining it increased fourfold.
This increase in productivity did. not stop when the war broke out; quite the contrary. The economist Fritz Sternberg writes:
“According to the Federal Reserve Index of industrial production (1935–39 equals 100), American output again reached the rate for 1929 (110) in 1939; this was because of the great increase in defense appropriations and the stimulation of production by (he war in Europe. In 1940, with the draft and beginning of Lend-Lease, the index reached 123, an increase of 13 per cent over 1929. And since 1940, American production was swelled by ANOTHER 50 PER CENT, even though twelve million of the most productive workers had been shifted from the labor market into the armed forces.” (Commentary, July 1946)
Such startling increases in both productivity and total production have been made possible by a number of causes. There have been certain special devices used during the war years, such as the use of child and “marginal” labor; the reckless exploitation of natural resources (e.g., in the Mesabi iron range in Minnesota); excessively long working hours, etc.
But the increase of productivity preceded the war and cannot be explained by it primarily. It is due largely to the continued development of science and research, which makes possible the production of new time-saving machines, new tools and techniques, new and cheaper sources of power, new synthetic products and now, for the first time, perhaps even atomic power. These developments, often prompted by capitalist enterprises frantically in search for new devices to make possible cheaper production and thereby greater profit, are of first importance. They warrant the boast made in a Department of Commerce report as early as 1926 which said:
“There is taking place in the U.S. a new industrial revolution, which may far exceed in economic importance that older industrial revolution which occurred in England in the eighteenth century ... We are witnessing what is perhaps the most remarkable advance in productive efficiency in the history of the modern industrial system.”
This “new industrial revolution” made possible the tremendous productive expansion which characterized the war years. By 1944, the U.S. was producing $200 billion in goods and services – nearly twice the dollar total of 1940. Once the adjustment in the value of the dollar is made, the gross national output amounted in 1944 to approximately $150 billions with the dollar having the same value as in 1940. This is still 50 per cent more than in 1940.
How was this tremendous expansion in productivity made possible? And what are the prospects for future expansion in productivity? These questions we shall answer in articles to follow.
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Last updated: 3 April 2020