RICH MAN'S VIDE TO CAPITAL

The slick style, the apparently new and attractive thesis and general air of fashionableness about this book has already achieved for it some influence in 'left' circles.

But while it rejects some of the common dogmas of bourgeois economics, its level is very much that of reformist trade unionism, which is not surprising as the author has worked for many years as an economist for American unions.

It offers a new explanation for the inflation of the past decade or so and ties it in with the growth of the 'multinationals' and with automation and the advance in technology. It is peppered with facts and figures and features revealing quotes from economists and businessmen which apparently give substance the argument of the DOOK.

Levinson rejects the view that inflation has been a result of pressure for wage increase or excess public spending. In his view it is bound up with the investment policies of the giant multinational corporations and the structural changes which capitalism has undergone under the influence of advanced technology.

He sets out to explain why inflationary pressures have persisted despite deflationary policies and industrial stagnation or recession and why unemployment has not been reduced by inflation or anti-cyclical government policies. He finds the answer in the policies of the giant corporations which dominate the capital-intensive industries. These firms, he claims, because of their monopoly position in the market, are able to fix prices to maximize profitability and provide funds •for investment.

But, because they employ advanced technology, wage costs form only a small part of their total outlay. They push up prices, not in response to wage pressures, but to increase the cash flow which permits continued growth.

Machinery is substituted for labour, productivity increases and wage rises are easily absorbed. If demand falls off, prices are not cut to increase sales, but raised to restore income. The emphasis is. on. maintaining and BOOK REVIEW 'CAPITAL, INFLATION AND THE MULTINATIONALS', by Charles Levinson. George Allen and Unwin. £1.50. increasing investment, the bulk of which is financed from sales.

According to this theory the main reason for continued inflation is the investment and price policy of the giant firms. The continued rapid rate of technological advance means that equipment rapidly becomes obsolescent and has to be replaced. Highly-skilled and trained workers are made redundant so that prices continue to rise even while technology and structural change create unemployment.

Levinson is good at describing certain of the features of monopoly capitalism and even makes the future for people living under this system sound pretty horrifying.

But he is a reformist trade union adviser, not a Marxist or a revolutionary. He assumes that capitalism will go on and on. He says nothing about the working class or its revolutionary role. The conclusions he draws from his analysis is that a few reforms are needed, not to replace the system, but to make it work better.

He minimizes the international monetary crisis of recent years, discounts the monetary forces behind the inflation and the strength of the working class and assumes that growth is now built into the system. He sees not the essence of the crisis, but a few symptoms and ignores altogether the Marxist analysis of capitalist development.

That is why his book remains superficial. He has seized upon some aspects of modern capitalism and magnified them out of all proportion. He has taken past trends and assumed their indefinite continuation into the future. He does not see the conflict and the contradiction nor any sign of capitalism's decay and collapse.

What it boils down to, then, is a tew arguments for trade unior negotiators confronting management. What he says is that big corporations can afford higher wages and they will be beneficial all round; they would even, he maintains, help to moderate the rate of inflation.

This conclusion he arrives at by claiming that higher wages mean bigger sales, which mean greater utilization of capacity and lower unit costs. Consumer prices could be lower, wages could be higher and investment rates still maintained.

For Marxists this argument contains elementary fallacies. Workers do not 'buy back' what they produce; it ignores the distinction between Dept. I (means of production industries) and Dept. !! (means of consumption industries); it ignores the labour theory of value and the basic contradictions of capitalism.

Levinson's reformism comes out in the final chapter. He justifies pure trade union militancy and puts forward a programme of structural reforms which includes such soporifics as workers' shares and saving funds and 'participation by workers in the decision-making process, through sharing in the power which ownership of assets confers on Implicitly he rejects the struggle to wrest control of the instruments of production : from the ruling class and instead calls on trade unions to 'update their analyses and reactions to match the modern shape of industrial activity.

The gloss of modernity on this book, and the fact that it has some interesting observations to make about modern business, should mislead no reader into thinking that it is anything but the old reformist stuff which has been peddled in the trade union movement for years by enemies Marxism and revolutionary