MIA > Archive > Fraina/Corey Archive > Decline of Am. Cap.
IN the claims of Niraism, of state capitalism, reappear, in slightly different form, the basic claims of the pre-1929 mythology of prosperity. The older prophets insisted that under the “new capitalism” wages necessarily secured large gains from increasing production and productivity; the antagonism between wages and profits had been ended, the capitalists “recognizing” that high wages and high profits are inseparable. The prophets of Niraism also insist that high wages are profitable to the capitalists: they want to “raise” wages and “control” profits in the interest of prosperity and of assured and higher profits. Thus President Roosevelt claims that “fair wages and fair profits” is the aim of Niraism. [1] The identity between the old and the new has been thus stated by a liberal critic:
“Both the plan for industrial codes and the Blue Eagle scheme were predicated on the assumption that capital would make voluntary sacrifices for the benefit of labor, in a spirit of patriotic endeavor, and also because the capitalist, if the scheme worked, would profit enormously from the increase in business which would then ensue. It should be noted that this plan contemplated no fundamental reorganization of our moribund economic system. Its central feature was an application of the old Hoover-Ford doctrine of high wages, exercised in a time of desperate economic distress and not, as it was originally conceived, when ample profits were being produced.” [2]
There is this difference: The pre-1929 apologists of prosperity insisted on the “unfettered” economic action of capitalism; the apologists of Niraism claim that the government will “control” industry to compel the capitalists, in their own interest, to “raise” wages and “limit” profits, and thus assure ultimately higher profits. But in practice both assumptions mean the same thing: It is possible to reconcile the antagonism between wages and profits if only the capitalists are convinced that higher wages mean higher profits and continuing prosperity.
The demand for government “control,” which distinguishes the prophets of Niraism from their predecessors, is very significant. One result of the decline of capitalism is the necessity of increasing state intervention to prop up the sagging economic order. This is the real purpose of Niraism and state capitalism: all else is mere ballyhoo. For intervention and “control” are by the capitalist state; they proceed, in spite of minor institutional changes, on the basis of the fundamental relations of capitalist production, in which profits and the accumulation of capital are the decisive factors. Profits control capitalist industry and must control intervention by the capitalist state. The state capitalism of the imperialist nations of Europe has not limited profits in general or raised wages. To understand why, and why there must be a similar American experience, it is necessary to analyse the relation of profits and wages to one another and to capitalist production, prosperity, and accumulation. The relation is clearly revealed in the economic movement and changes of 1920-29.
1. New York Times, July 25, 1933.
2. Editorial, Public Works to the Rescue, New Republic, September 6, 1933, p.87.
Last updated on 30.8.2007