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Dwight Macdonald

Sparks in the News

(30 December 1939)

From Socialist Appeal, Vol. III No. 95, 30 December 1939, p. 4.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Book Bargain

Without much question the book bargain of the year, of many years, is a quarto, of 396 pages entitled: The Structure of the American Economy, Part I, Basic Characteristics. It is put out by the National Resources Committee, a government research agency, and was prepared by a large staff of economists under the direction of Gardner C. Means (who was co-author, with Adolf Berle, of The Modern Corporation and Private Property). It is printed on coated stock, with many charts, graphs and maps, covering everything from interlocking directorates of the two hundred biggest corporations to the amount of money spent by various income groups on food, clothing, tobacco, books, etc. And it can be obtained by sending one dollar to the Superintendent of Documents, Washington, D.C.

Marxists should find this book as absorbing reading as any detective story. They will not expect Mr. Means and his staff to reach any valid conclusions, and in this they will not be disappointed. Mr. Means reaches no conclusions at all, in fact, which is in this case perhaps a virtue. But he does present frankly and honestly – within the limitations of the ruling class outlook – the basic data on which any sort of effective political thinking, Marxist or not, must be based.

Lost: Two Hundred Billion Dollars

In the next New International I plan to analyze and summarize some of the wealth of data in this book. But there is one point made here which is so dramatic an exposure of the insanity of our capitalist system that it seems worth emphasizing here.

Everyone knows that during the last ten years there have been from 8,000,000 to 16,000,000,000 American workers for whom the system could not provide jobs. Everyone, and especially the unemployed themselves, know to what wretched, subhuman depths of poverty these millions have been reduced. But it will come as a shock to most people to learn that if the available manpower and machines in the country had been employed fully in the eight years, 1930–1937, our society would have produced two hundred billion dollars more goods and services than it actually did.

Two hundred billion dollars is so huge a sum that it might as well be two dollars. When figures reach a certain magnitude, they cease to make any impression on the mind at all. They become abstract concepts, like the number of trillion light years it would take to reach some distant constellation. This volume however, makes it clear what this figure means:

“The significance of this figure of two hundred billions is hard to grasp, but some idea can be obtained by considering what two hundred billion dollars would mean in terms of concrete goods. If all the idle men and machines could have been employed in making houses, the extra income would have been enough to provide a new $6,000 house for every family in the country. If, instead, the lost income had been used to build railroads, the entire system of the country could have been scrapped and rebuilt at least five times over ... Failure to use available resources meant a lower standard of living for practically every group in the community.”

Later on, Means puts it in another why: “If the whole waste of the depression due to idle men and idle machines could have been used to build agricultural and industrial plant, the existing plant could have been completely rebuilt.” That is, if we had had an economic system not in contradiction to our productive forces, if socialism had replaced capitalism in 1929, then every steel plant in the country, every cotton mill and packing house and shoe factory and every other industrial plant from Ford’s River Rouge plant to the smallest one-room machine, shop, every mile of railroad track, every locomotive, every barn and silo and grain elevator – all of this and a thousand other such categories of productive plants could have been duplicated if the unemployed had been fully employed in those eight years. Today we would be able to produce just twice as many goods and services as we actually are able to produce.

Still More

Nor is this all. Even when our cockeyed capitalist system is functioning at its very top form, even in the boom year of 1929, it was unable to make anything like full use of our productive resources.

“The Brookings Institution,” writes Means, “has estimated that in the peak year 1929 both production and national income could have been increased 19 percent by merely putting to work the men and machines that were idle in that year, even without the introduction of improved techniques of production.”

Nor is this all. Means’s figure of two hundred billion dollars only goes through 1937. But in the fall of 1937 there occurred the sharpest economic decline in the history of American capitalism. In half a year, unemployment rose by 3,000,000 to a total of 13,000,000; in a year, the farm price index dropped from 128 to 92, the index of industrial production fell from 118 to 76. Only now, under the artificial stimulus of a war boom, is our economy painfully climbing out of the wreckage of 1937.

Means has no estimate of the losses from unemployment in the last two years, 1938–1939. Considering the severity of the 1937–38 slump, it seems conservative to put the loss in the last two years at the same rate as in the preceding eight years. This would mean adding another fifty billion dollars, which would be enough to replace every residential building in the country, from Park Avenue apartments to sharecroppers’ shacks.

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