ECONOMICS |. DEPRESSION MAY TAKE A DRASTIC TURN

The Newsletter, vol. 2 no. 72, 11 October 1958 · scan page 3

Read from the scan by machine and not corrected: headlines and words can be misread, and a caption or advert can run into the text. For anything you quote, read the scan.

WOMEN STRIKERS ARE DETERMINED TO THOSE who want to know how deep the current recession will go must understand that there are so many unknowns in the situation that no firm answer can be given. But there must be continuous appraisal of the symptoms.

Capitalist prosperity in the 1950s was a product of an investment boom, jumping off from a high level of public expenditure, notably on arms.

In the most recent phase business men expanded plant from high profits, anticipating more from the exploitation of new techniques. It was a classical capitalist expansion, with the seeds of its own exhaustion within it.

This is now history. The boom has faded and will certainly fade still further.

It seems likely that in Britain a number of special factors have intervened to hold back decline. The picture is much more complicated than the platitudes and evasions of the platform speakers at Scarborough might lead one to believe.

To see the source of the crisis in deliberate ‘Tory stagnation’ is a fallacy—a fallacy that must be upheld in order to justify the ‘shadow’ policy of the shadow Chancellor.

Employers’ hand held back Some aspects of the industrial situation which have been stressed in recent publications need to be considered carefully.

The London and Cambridge Economic Bulletin suggests, for example, that the demand for labour has been maintained by ‘hoarding’ on the part of employers, a switch to higher quality products in order to retain markets and continued high investment within firms.

In fact there is now a great deal of below-capacity working. .. and hidden surplus labour. The full possibilities of newlyinstalled machines have not yet been taken advantage of.

This means that a considerable increase in output, and in productivity, is possible without an increasing demand for labour. More, large-scale dismissals could take place without a fall in output.

For the moment the hand of the employers is held back, for numerous reasons. They may be simply waiting for favourable market conditions, for possibilities of dividing the workers and striking at the most favourable moment at the gains made by the workers under full employment.

All these possibilities need to be carefully watched as a Part of. militant industrial strategy. _ Another factor concerns the rise in stocks, particularly of ‘oe -