By Gerry Harant
After the end of World War II, everybody predicted that the capitalist economic system would be coming to an almost instant sticky end. The world Communist parties knew it; the US establishment feared it and ran an intensive anticommunist crusade both at home and overseas.
To everyone's surprise, the universal collapse didn't happen (it still hasn't). Economists, conservative and radical, looked for causes. In terms used by Marxist economists, counters to the tendency of under-consumption inherent in capitalism lie mainly in five areas — new industries, faulty investments, population growth, unproductive consumption and state expenditures.
There is no need to detail the waste involved in military spending, now a $10 billion item in the Australian federal budget, and faulty investment which now has 1/3 of CBD office space standing idle. However, for my money, unproductive consumption rates most highly.
'Consumer society'
Even at the best of times, disposable income, the part of the wage not absorbed by paying for necessities, was never very substantial for the majority. The question arises: is productivity still rising, and where are the goods produced going to?
In recent years it has become fashionable to define productivity as dollar throughput per worker, which makes a miner or refinery worker many times more "productive" than skilled workers in manufacture. In this sense, productivity has indeed risen in many industries. However, if you measure productivity by the total cost of production of consumer goods, the picture is quite different.
Expressed in terms of the median wage, a car today costs much the same as it did 50 years ago. Admittedly, it carries a fair bit more in the way of heaters, anti-pollution gear, radios and so on; but this in no way explains why there should be so little change in selling price during a period in which labour productivity is reputed to have risen by a factor of five.
In the case of cars, we can identify a number of areas where expenditure has risen dramatically. They are mainly connected with the oligopoly in the car industry, which, by and large, has done away with price competition.
Most costly are the frequent model changes, involving development costs, tooling, and the inevitable production glitches. This regime of model changes alone is reputed to have put some 20-25% on new car prices, as economy of scale goes down the gurgler.
More and more lavish marketing and retailing also take a toll, with ever more gimmicky advertising campaigns, which cost a fortune, adding to the non-price competition.
The shopping 'culture'
No matter where you live, yet another glitzy shopping centre is either being built or expanded; indeed, this is one of the major areas of investment of the compulsory saving currently touted as superannuation. Rents in these palaces are sky high.
Each centre runs its own massive local advertising, in addition to brand advertisements. Yet overall incomes are shrinking. The extra costs are not recovered from additional sales, but from steadily rising retail margins.
At the end of World War II, retail margins were pegged at 49.5%. To-day, retail mark-up ranges from 100 to 300% or more. A dress made by sweated labour for $3-$5 plus material will sell for $80-$100 in "up-market" shops.
However, this rip-off does not necessarily result in super profits. Indeed, bankruptcies in the retail sector are legion. So, what do you get for the dollar you spend in a retail shop?
Even if we can't specify percentages, which vary, we can list some of the items in your enforced shopping list:
- <~>necessary materials and labour in the item itself;
- <~>fancy packaging;
- <~>the cost and profit of the distribution chain;
- <~>shop rent, electricity, heating, window dressing;
- <~>shopping centre promotion;
- <~>shop labour;
- <~>taxes, bank charges;
- <~>legal and accountancy fees;
- <~>insurance;
- <~>advertising of the product;
- <~>advertising of the shopping outlet;
- <~>transport costs;
- <~>payroll tax.
Given the profits in some of these areas, it is understandable that capitalists in "advanced" countries have largely lost interest in manufacture. The defining term for the consumer society is waste, as almost none of the activities listed above are of any use to people other than exploiters. However, generating this waste fuels some of our biggest industries, such as printing.
Making work
Unfortunately, the union movement and many of the old left see nothing wrong with all this. "It all makes work", they say, and the unqualified "right to work", regardless that such work may be destroying our forests or making landmines to mutilate children, has featured on banners for over 100 years.
The struggle for a better life is often likened to "getting a bigger slice of the cake". Apart from the bosses' share and our share, there is an increasing share which is eaten by the rats of waste. Granted that this share may be what has kept the system from collapsing, it would still be perverse to see waste as a positive feature.
We don't need to "create work". There is work which is desperately urgent, and there are people to do it. The capitalist system is simply not the means of providing for human needs using readily available human resources; the realisation of this contradiction is precisely what has turned us into socialists. It would be absurd for us to argue for yet more economic activity which goes counter to our needs.
The planet's resources are strained to breaking point by population growth. Currently, the resources required to sustain this growth until it can be stopped and reversed are squandered to enrich the capitalists and, coincidentally, "make work". If the resources use in "advanced" countries spreads to the "developing" countries, catastrophic shortages will soon dominate the world's thinking.
Real work
Socialists can no longer afford to adopt a schizophrenic attitude which, on the one hand supports, by asking for "more work", the frantic efforts of the capitalist economy to manufacture growth, while deploring, on the other hand, the damage to the earth which is an inevitable result of compliance with this demand.
For one thing, the "real" work that keeps us going is not done predominantly by paid men in the factories, banks and insurance companies, but, as always, largely by unpaid women who are still providing most of our needs. Even farming, except for agribusiness, is again largely reverting to individuals with no employed labourers; even factory-made chemicals are being phased out.
In Australia, even today we could minimise paid work, reducing the time spent on alienated labour to 10 hours or less per week, performing community-based tasks instead.
Despite the way capitalism is becoming more horrific day by day, the old Communist programs and their later variants have not succeeded in firing people's imagination — largely, I think, because they merely offer, in principle, the old industrial society in a marginally different and presumably more benign form. That this disinterest should happen in one of the few countries in which a genuinely different lifestyle still appears possible is sad; it should provide an impetus to us to do better.