III. World Production and Accumulation

In the light of the characteristics of the present period of decline of the capitalist system mentioned above, we shall try especially to examine into world production and the accumulation of wealth.

WORLD PRODUCTION.—Table I in the Appendix affords a picture of the world production of the most important goods, in so far as statistics are available. If we compare the production of 1913 with that of 1923, we gain the impression that pre-war production has almost been reached. But in estimating the importance of this table we must emphasise the following:—

(1) The year 1923-24 was a very favourable one any way for wheat and grain; if we were to contrast the average for 1920-23 with that for 1909-13 (this average has unfortunately not been published as yet by the Institute of Agriculture), it would be clear that the normal pre-war production had by no means been reached as yet.

(2) The increase of production applies to the non-European countries. (United States, Canada, Argentina). Europe still lags far behind the pre-war period.

(3) Production in the heavy industries, which is especially important to capitalism, has not yet reached that of pre-war times. In millions of tons the production was:—

In these branches of production, which are so characteristic of the capitalistic system, the production of 1913 has not yet been reached, although the year 1923 includes the apex in the American boom.

(4) Under normal conditions the production of iron and coal shows a tremendous increase from decade to decade. (See Table III in the Appendix.) During the decade 1913-23 this increase is wanting. Whether it will take place during the coming decade is doubtful. Considering the fact that the peak of the American boom, which before all others furnished the increase of production during the last few years, has no doubt been passed, and considering the fact that European business passed through no such boom, we deem it unlikely that a similar increase is to take place during the ensuing decade.

Production figures therefore furnish no basis for claiming that the critical period has been passed through. The low production in the heavy industries is all the more significant as the capacity for production is much greater than before the war. A large part of the plants is not producing at all. At the other extreme we observe the long continuing unemployment; we shall recur to it in another connection.

ACCUMULATION.—In dealing with the question of accumulation we shall differentiate between the accumulation of wealth and the accumulation of capital, to avoid the possibility of mistakes. Under accumulation of wealth we understand the increase of the objects of value in the possession of a people, irrespective of classes; in other words, the difference between a year’s production of values and their consumption, By accumulation of capital we understand the increase of that part of the wealth that is used as capital and is in the hands of the capitalist. The accumulation of wealth and of capital under normal capitalism run along parallel lines, inasmuch as it is the capitalist class to whom the newly created wealth chiefly accrues in obedience to the law of capitalist production.

There is, however, also the possibility of the very opposite development in the accumulation of wealth and capita1. It is possible for the wealth that is in the hands of all classes to remain the same or to become less, while at the same time an accumulation of capital takes place, in that apart of the wealth of the non-capitalist classes passes over into the hands of the capitalists and increases their capita1. Disaccumulation (decrease) of wealth and accumulation of capital are not necessarily exclusive one of the other.

The question now arises whether at present there is actually an accumulation of wealth and an accumulation of capital, or not. The answer to this question would be interesting for this reason: the comrades who adhere to Rosa Luxemburg’s theory of accumulation consider this question as of vital importance in determining the prospects of a revolution. In general they are of the opinion that the capitalistic order of society cannot be maintained without accumulation; some of them draw from the premise that capitalism is still accumulating the conclusion that there is no crisis whatever of capitalism; and that therefore the prospects for a revolution are very slight.

I do not share any of these views, at least not when expressed so dogmatically.

The want of possibility for accumulation means reduced production and therefore a more bitter struggle of the classes for the division of the annual product; hence also better prospects for a revolutionary movement of the proletariat. The cessation of increase in the means of production means—under capitalist conditions—that new generations on reaching the age when they can work are unable to find work even during the height of a boom; this fact tending to aggravate the situation. But the absence of accumulation or even disaccumulation is by no means a guarantee for the breakdown of capitalism. Capitalism can move in a retrogressive direction; a partial return to pre-capitalistic forms of economy can take place; untold millions can die of hunger or be seized by plagues; one or several capitalist countries can accumulate at the expense of the capitalistic countries that are “decapitalizing” themselves; but the domination of capitalism can nevertheless remain if the proletariat does not wrest power from it by revolutionary means. It seems to us that speculation upon the impossibility of accumulation as a premise to the revolution represents considerable opportunism.

On the other hand the existence of accumulation by no means proves that a proletarian revolution is hopeless. The accumulation of capital may have been forced by reducing the real wages of the workers and by the successive expropriation of the middle class and the peasantry; it therefore by no means precludes the existence of revolutionary situations; in which connection it may be admitted that a real accumulation of wealth as the result of the raising of the standard of life for all classes creates a situation unfavourable to the revolution. The latter situation would, however, develop only in case capitalism throughout the world were to take a new lease of life.

It would certainly be useful to determine by means of figures whether or not an accumulation—in both forms, accumulation of wealth and accumulation of capital—took place during the last years.

The answer to this question is exceedingly difficult.

The question of actual accumulation of wealth is perhaps most easily determined by certain signs; by building activity in the broadest sense; by the size of visible stocks of wares; by the condition of the means of communication and of the cattle, &c.

The most important sign is certainly the building activity, since every extension of the establishments in which production takes place also means the extension of building operations, and since, on the other hand, building activity signifies the conversion of present productive forces into a natural form, the amortisation of which will probably take place in 30-100 years, and which therefore is the typical form of accumulation.

Now, we observe that in the United States, during the past two years, and presumably also during the year 1924, there is a tremendous building boom in the United States. Several billions of dollars are set aside annually for building purposes—for factory buildings, houses, warehouses, schools, &c. This means real accumulation; as does also the investment activity of the railways, the rapid increase in the number of automobiles, &c. This accumulation of wealth certainly also means the accumulation of capital in most cases!

A different situation obtains in Europe. Building activity everywhere is only a fraction of that of pre-war times. In all the large cities there is an appalling dearth of houses. Railway construction and other large operations likewise take place in only a reduced manner. From this one can draw but one conclusion, namely, that the accumulation of wealth proceeds, if at all, at a much slower pace than before the war.

An exception seems to be furnished by France, which during the last few years almost completely rebuilt its devastated areas. However, in evaluating this fact one must take account the further fact that operations in other parts of France were exceedingly limited; that France received payments of considerable size from Germany, and that it was supplied with credits from other countries; also, that a part of these investments was paid for at the expense of the middle classes through inflation.

As concerns the accumulation of capital, its progress is much more difficult to judge. The estimates of national wealth usually put forth by bourgeois writers, the inclusion of capital in stock companies, the deposits in banks, &c., cannot serve as an acceptable basis. Under national wealth are included sham items, such .as land values (capitalistic ground rent); through the system of mutual participation and holding companies the same actual item of wealth appears several times; through the depreciation of gold (the purchasing power of which is at present about one-third less than before the war) all estimates seem exaggerated. In countries with unstable exchange these estimates are encumbered with the further factor of unreliability.

For this reason we can do nothing with estimates of this kind. “We must rely upon the general observation of economic facts. These reveal the following:—

An accumulation of capital running parallel with the accumulation of wealth in the United States, in the English colonial settlements, and in general in the capitalistic areas outside of Europe.

An accumulation of capital upon the basis, for the most part or entirely, not of the increase of wealth, but above all as a result of the transfer, brought about by concentration and inflation, of wealth formerly in the hands of non-capitalist strata of society into the hands of capitalists in the countries of Europe.

Assuming that the sources of errors are about the same, certain interesting deductions may be made: if we eliminate government loans as not real accumulation, new emissions total 186.8 and 144 millions respectively for 1912 and 1913, and 131.1 and 97.9 millions respectively for 1922 and 1923. When we consider the reduced purchasing power of gold and its depreciation, a marked decrease of actual accumulation results. And as the economic position of England, despite the heavy crisis in the export industry, is by no means less favourable with reference to the possibilities of accumulating than that of the other European countries, we may conjecture from this that but limited accumulation is taking place in all of Europe.