Cooking the Books 2 – Progress and pauperism

Elon Musk supports capitalism. Well, is the Pope a Catholic? In a tweet on 23 October he recommended a new book called The Capitalist Manifesto. ‘This book’, he tweeted, ‘is an excellent explanation of why capitalism is not just successful, but morally right’. We are not concerned here with the contents of the book, by Johan Norbert, subtitled ‘Why the Global Free Market Will Save the World’ — another time perhaps — but with a passage in the press release the publishers put out:

‘Marx and Engels were right when they observed in The Communist Manifesto that free markets had in a short time created greater prosperity and more technological innovation than all previous generations combined.’

Marx and Engels certainly made the second point, almost textually, writing:

‘The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together’.

But there is nothing in the Communist Manifesto about capitalism creating ‘greater prosperity.’ On the contrary. If anything, Marx and Engels went too far in the opposite direction, ending the same section:

‘The modern labourer (…) instead of rising with the process of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth’.

The complete pauperisation of the working class did not happen in the long run — at the time Marx and Engels didn’t think that capitalism was going to have a long run — but a growth in workers maintained by the Poor Law was an immediate effect of the Industrial Revolution and an accurate observation of the situation in 1848.

In exile in England in the early 1850s, Marx and Engels came to realise that they had been mistaken in believing that a working-class communist revolution had been likely in 1848. Marx settled down to studying how capitalism worked, the result being the publication of the first volume of Capital in 1867.

Nobody who has read Capital, particularly the historical parts, could claim that Marx ‘observed that free markets had … created greater prosperity’. Marx described in detail, on the basis of official government publications, the terrible working and living conditions of workers in a whole series of industries. In section 4 of chapter 25 on ‘Different Forms of the relative surplus population’, he returned to the question of ‘pauperism’.

He now no longer argued that as capitalism progressed all workers would tend to be reduced to below subsistence level, to paupers. However, he still expected that some sections of the working class would be, ‘that part of the working class which has forfeited its condition of existence (the sale of labour power), and vegetates upon public alms’; whose labour power was unsaleable because they were old, sick, disabled or industrially injured, but also because during the slump phase of the business cycle there was no demand for it.

Since capitalism needed a reserve army of labour and ‘pauperism is the hospital of the active labour-army and the dead weight of the industrial reserve army’, it ‘forms a condition of capitalist production, and of the capitalist development of wealth’.

Marx has been proved right about this. Ever since his day a section of the working class — at least 1 in 10 — has had to ‘vegetate on public alms’ (until 1948 the Poor Law, later National Assistance, then Social Security, now Universal Credit) — and will as long as capitalism lasts. Technological innovations under capitalism may have solved the problem of how to produce enough wealth for everyone but as a system it is constitutionally incapable of distributing it so that everyone’s needs are even adequately met.

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