Society Will Benefit by Shorter Hours

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Unemployment cannot be banned without far-reaching shortening of working hours. Of course it is important to the worker that this should be achieved without cuts in daily wages.

No doubt, a far-reaching shortening of hours without reduction of daily pay raises serious economic problems which need to be solved if economic life is not to suffer. But there is nothing more wrong than to say that they have no solution.

In the first place we need to consider that concerns of the highest technical order and of greatest importance to the economics of the country are least affected by the question of wages. For of the capital invested in such concerns only a small percentage is used for wages.

What really affects these companies is the insufficient use made of their enormous fixed capital consisting in buildings and machinery. But it is just here that a shortening of working hours, if coupled with longer business hours, gives them wider scope for profit.

The daily working hours of a hand and the working hours of a plant are in no way identical. If the hours of employees in a factory were reduced from eight to six, profits may rise, even if daily wages remain unaltered and the prices of individual products are not increased.

The growth of profits here can result from the fact that two shifts are at work and thus the working hours of the plant are now, e.g., twelve instead of eight. Thus in this case the value of the goods manufactured per day rises by 50 per cent., while the fixed capital invested in the concern remains unaltered. In companies which already have uninterrupted production in three working shifts profits will remain unaltered or even grow, if machines that have to now only worked half of the capacity are, since the shortening of hours, run to full capacity.

Individual concerns may well apply such methods to avoid a decline in profits which shorter hours threaten. But they would not fit every type of business. They would be profitable only for special concerns in particular circumstances. Happily, we are not tied exclusively to such methods. Other possible ways cannot, however, be applied by individual companies alone – Government action is required.

The amount of profits on capital during a year does not only depend on profits made in a single day but on the yearly turnover of capital. If, with a certain amount of capital, goods are manufactured at a profit of 3 per cent, the capital will yield 15 per cent. per year if it is turned over five times. If business becomes brisker, the capital is turning over ten times in a year, it will yield 30 per cent of profit. Even if profits on daily production decline from 3 to 2 per cent, 20 per cent of profits may be achieved.

The less fixed capital means to a firm, the more funds spent on wages prevail in it, the more a lessening of profits owing to the shortening of the working day will be balanced by a speeding up of capital turnover, if a general improvement in business conditions sets in. Now the mere addition of extra workers employed at the same standard of wages must improve business, as by this fact the number of purchases in the market increases. Apart from this, a Government, which is so far influenced by the working class as to bring about a radical shortening of hours, must adopt other measures as well to stimulate the economic process. In my last article on the fight against unemployment (Unemployment Has Two Roots, Labour, April 1937), I have already pointed this out.

But in other ways as well the Government can counter possible disturbance of economic life caused by the shortening of working hours where this would lead to a rise in the cost of production. It is a queer idea of some economists that they reckon wages alone as cost of production. It is true that Marx, and with him the School of Classical Political Economy, asserts that the value of goods is established by the amount of labour sunk in their production. But this labour does not merely equal wages, and it is not in the least the case that the industrial capitalists calculating business regards as costs of production merely the wages he pays.

What Marx calls surplus value, i.e., unpaid labour, he subdivides into profits, rent and interest. The individual industrial capitalist has frequently to part with a share of surplus value he makes to the landlord in the shape of rent or lease, and to the banker as interest. But the manufacturer does not assess rent and interest as surplus value – this category is non-existent for him – he classes them as costs of production accruing to him through the agency of his banker or landlord.

If at a stage where costs of production are rising, owing to shortening of hours with stationary wages and prices, individual manufacturers fail to make up for this either by a wider use of their fixed capital or by quicker capital turnover, it is by reducing rent and interest that rise and reduction may be balanced. No danger for society need be apprehended.

The workers, including clerical assistants, are the most important persons for the function not only of socialist production but already of capitalist business. Then only comes the organiser of the enterprise, its manager, or – constantly decreasing in importance – its owner. The roles of the landlord and banker, so far as they derive their income solely from letting their property or taking interest on their funds, are totally superfluous. If by Government measure rent and interest are reduced, society will in no way suffer but, on the contrary, benefit. The industrialist that can borrow "cheaper" money will see his costs of production lowered considerably, the tenant who receives soil for cultivation at a reduced rent will profit as well. Farmers running their own property will benefit if the mortgage interest which for them symbolises the burden of rent, dwindles.

Individual manufacturers cannot do much here. To achieve this aim, a strong, i.e., democratic State, enjoying the confidence and the energetic and understanding cooperation of the masses, is needed. Nationalisation will become a necessity, for example, for the establishment of publicly owned credit banks.

Apart from the above factors that make up the cost of production, there is another one of great importance: the price of raw materials. These prices are artificially raised to a high degree by great monopolies and high tariffs produced by them. How important, for example, is the price of iron for the whole of industry, agriculture and the transport of a country! Already by the reduction of customs by Government action regarding monopolies, which may go and eventually must go as far as their complete nationalisation, it is possible to more than balance an ensuing rise in the cost of production owing to shortening of hours.

Therefore, even where such a rise occurs, it does by no means prove the harm of a shortening of hours. It just proves that it is necessary that this should not be considered as an isolated action but should have its place in a far-reaching system of social reform.

In the history of the legal shortening of the working day one can distinguish two phases: one primitive, which begins already in the middle of the last century, and a later one, of the last decades. In the first phase the normal working day was introduced, to protect the labourers of large industry against limitless over-work and to save them from complete deterioration. This has been achieved, legal labour protection has placed the working class of the capitalist states on a higher level, physically, morally, intellectually. And not only the working class has been organised. The transition to the shorter working day, succeeded among businessmen the sooner, the more intelligent and diligent they were, the better they understood new methods. The dumber and more apathetic, slovenly a businessman was, the easier he went bankrupt with a shortening of the working day. Thus a shortening of the working day performs a regeneration not only of the labourers, but also of the capitalists and their businesses. It raises the whole economic system on a higher level.

This applies for the first era of labour protection, as long as the labourers are degraded and demoralised by over-work. Likewise a shortening of labour time functions today. Yet not in the same manner. Not over-work, but unemployment threatens now enormous numbers of workers with degradation and demoralisation. If unemployment is successfully eliminated, then thereby one suspends the most grave, moral, physical, intellectual hazard of the working class of our time, one elevates the proletariat on a higher level.

Simultaneously thereby however, as in the beginning of the labour protection, also the whole production system is raised. And yet a difference exists. Back then this elevation was obtained by the capitalists themselves. Today the shortening of the labour time makes a series of measures desirable or necessary, which one can not leave to the capitalists alone; which often also go beyond their powers. They require for their implementation a strong intervention of the state power, which already must lead to an expansion of the state economy.

Such interventions can only be expected in democratic states with an as strong as intelligent working class. The fist alone does nothing, it must be lead by a thinking, learned head. And also the intelligence of a leader does nothing, the masses must be intelligent as well.

Since the World War a narrow-minded worship of violence spreads itself not only with the fascists, but also with many socialists. They imagine that we need only possess the necessary force and violence, to beat our opponents, then the socialist society will arrive by itself. Unfortunately the matter is not so simple. If a ruler applies brutal power without knowledge, then he damages often not only the opponent, whom he beats, but also himself.

The stronger the proletariat, the greater its power in the state, the more daunting and difficult its tasks, the more momentous their solutions. Only a working class, which besides the required power, possesses the required knowledge, namely, the economic, will be able to achieve fruitfulness, to bring about an enduring higher order of society. The winning of power depends however not only on the workers, but also on numerous circumstances, which they can not induce at discretion. Much sooner they can procure the required knowledge, this is everywhere in all circumstances an essential task for them.