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Albert Gates

20th Century Fund Study Proves
Need for Socialist United States

(26 May 1947)

From Labor Action, Vol. 11 No. 21, 26 May 1947, p. 3.
Transcribed & marked up by Einde O’Callaghan for ETOL.

THE digest of the 20th Century Fund report called America’s Needs and Resources, sets out to prove that between the years 1950–60, the development of technology in production will have reached such a height that the standard of living of the population in the United States will, or can, rise immeasurably. Financed by Edward A. Filene, Boston businessman, former New Dealer, and a bit of philanthropist, the fund committee, composed of an assorted group of economists and statisticians, examined a variety of factors to prove their contention.

The report, if one is to judge by the digest, has only a limited importance, since the material presented is not wholly new or pointed. Yet it adds to the accumulation of data to prove the contention of revolutionary socialists that modern productive methods have reached a level of growth capable of supplying the basic needs of the masses and raising their standard of living beyond that which the richest capitalist nation in the world is ready, willing and able to give.

The factors cited in the report which promise a high level of production in the coming years has already been presented before. For example, the resolution of the Workers Party on the United States which examined the development of the war economy on the basis of the vast material submitted by government agencies and private economists, described the tremendous growth of production but showed how this very growth created all the conditions for a future economic collapse of great magnitude. It was on the basis of this growth too, that so many economists forecast a sharp crisis in the reconversion period with millions of unemployed. They erred, not in their fundamental analysis, but in their timing, for the factors which led them to make that prognosis still hold good.
 

Productivity Is Key to Estimate of Future

The Fund Report enumerates several important factors in the present American economy and endeavors to show how these can lead to what it calls a new period of vast prosperity. Let us summarize these, but also show some of the contradictions which accompany them.

1. Population growth. While establishing a definite limit to population growth (end of immigration, smaller families, decline in birthrate, etc.) the committee records the fact that the war with its full employment, coming after the long years of the crisis, was an impetus to marriages, a growth of families and births as a temporary phenomenon. For the period of 20 years, between 1940 and 1960, the fund foresees an additional growth of 22 million. While this would normally create a larger home market, it will also provide a larger working population and increase the potential army of unemployed. However, given the primacy of the heavy goods industries and the necessity for an increasing production and export of capital goods, the increase of the home consumers market, will not have much weight in favor of a future long-lasting prosperity such as the fund projects provisionally for the above years.
    
2. What will this increase in population mean concretely, in relation to the actual working force. Using the war years as a standard the fund foresees a working force of 60 million in 1950 and 63.4 million in 1960. On the basis of figures taken over a long period of years it assumes that five per cent of, the working population will normally be unemployed even in years of high prosperity.
    
3. Productivity is, of course, the key to. the whole estimate made by the fund. Here the rate of growth is interesting indeed, for it exposes more than anything, else the exploitive nature of capitalist society in the fact, that the tremendous technological advances which accompanied the enormous rise of productivity on the part of the workers individually and as a class, did not redound ,in favor of the masses but went to increase the profits, wealth and incomes of America’s capitalist class.

The above index records this growth.

Between the years 1860 and 1940 the volume of production and the use of energy increased 11 times. From the above figures, the fund draws the conclusion that the technological advances and the increase of productivity did not necessarily lead to an excess working force and that the inventions in turn produced new jobs to absorb Workers thrown out of jobs by technological changes. The fund believes that the future years will see a repetition of the features of an economy in growth. In making this forecast, however, the fund’s economists have apparently overlooked the meaning of the 1929–39 crisis.

Report Overlooks Factors of Decline

The report makes a provisional estimate, also on the basis that everything will be normal, that it is reasonable to expect a “gross national product of $177 billion in 1950 and $202 billion in 1960.” Is this good? It would mean that a fifth more goods would be produced in 1950 than in 1941 (a war year!). But the coming years will also bring higher taxes and lower savings, and despite the fund’s hopes, a relatively shrinking home market. Although the report declares that the increase in productivity for the coming years will mean a higher standard of living for the masses, they overlook the factors of high prices, declining quality of goods, lack of housing and other decisive elements which go to make up a standard of living.

Yet the capacity of American industry, not necessarily continues to grow, but even if this is static or declines, the basic mechanization of industry does not make this a serious factor. The war years have shown that given the existing industrial plant in the country, rapid expansion is always possible. The growth of productivity over the past nine decades has averaged 18 per cent per decade. The fund Estimates that from 1940 to 1960 another 30 per cent growth can take place.

All of these positive factors, serve as the basis for the fund’s optimistic picture of the next decade or more. Naturally, the factors of decline do not make up part of the estimate provided by the digest of the voluminous report. But one can easily see what is wrong with its basic approach. Its analysis is not truly all-embracing ... It does not take into account the relation of American economy to world capitalism. The meaning of the crisis of the Thirties plays no part in it either, nor does the special nature of the war economy and its "artificial" expansion through government demand and monies. Yet it is upon a proper placing of these factors that one’s prognoses of the future of America depends.

It has been clear to the Marxist economists, at least, that the crisis of the Thirties was no ordinary cyclical crisis, but a collapse of permanent character, the decline being precipitate and halted only by the outbreak of the greatest world war in the history of mankind.

America came out of the war the undisputed power of the world with a highly expanded economy. The domestic market can in no way meet the requirements of this expanded industrial potential which was given such impetus by the war. To meet the needs of its new industrial expansion, American capitalism must conquer the world market, otherwise, a decline of production, and a contraction of the industrial potential must follow. That would mean not a new wave of prosperity, but a new series of sharp crises signalizing the collapse of the one remaining capitalist economic power.
 

Only Hope for Society Is Socialist Victory

Without considering this decisive factor, the fund could only draw a series of lovely portraits of what is possible given the enormous American industrial organization. Here is the nub of the whole question. Given a capitalist society, the wonders that are possible with this industrial organization will never be realized. For, under capitalism, the one decisive motive of production is profit. The slightest disruption in profit, its decline, which would attend America’s inability to conquer the world market, would lead to a cessation, of industrial activity at home and usher in the new crisis.

While the report does foresee the possibility of a rising standard of living on the basis of figures alone, the real capitalism does not operate that way. The post-war years have already seen a diminution of the standard of living of the people even though industrial production is high. Given peace and the absence of government funds, private capitalism has returned to its more classic forms of operation. For all the wails of the. bourgeoisie, it continues to take such an enormous share out of the total production under conditions of.a contracting home and world market, that a rise in the standard of living of a whole people is not possible without a sharp cutting into the profits of America’s ruling class. And given capitalism, the process works otherwise: profits are maintained, if there are any profits to be drained out of production, at the expense of the masses. In the absence of profits, there would be no production at all.

What the report does point out in abundance is that the precondition for a decent life is present in the industrial organization of the country. But this could be realized only with a total reorganization of society and by an elimination of the private ownership of the means of production, and of profits as the motive force in the production process. A socialist reorganization of society which would establish production for use on the basis of a production of abundance, could, given even the present industrial apparatus. provide for a decent standard of living for all the people. And given such a social organization, there could not possibly exist, for example, the present housing crisis which will continue as long as the sole interest of the housing industry is profit.

If one wants to see how rotten the body of capitalism has become, he need only examine the 20th Century Fund Report and relate it to the real society we are presently living under. The need for socialism will loom only greater in his eyes.

 
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