Veteran Marxist economist Justus Ebert on a tendency of capitalism that has expanded exponentially since this was written.

‘Techno-Crazy—That’s Capitalism!’ by Justus Ebert from Labor Age. Vol. 22 No. 1. February-March, 1933.

CAPITALISM is in an awful jam. By way of the machine it aims to operate industry at a profit, without men and with increasingly more productivity and less purchasing power among the masses of the people. By means of automatic mechanism it is increasing production, displacing workers, and depriving ever growing numbers of the ability to buy. When Technocracy shouts “Look out; you’re heading for a smash,” Capitalism retorts, “Aw, shet up; you’re nutty.” Then it goes on its perverse way to introduce more machines, displace more workers, destroy more purchasing power, while turning out more output.

Just how Techno-crazy capitalism has grown may be judged from the fact that this country now has 1,700 industrial research laboratories as compared with only 200 ten years ago. With almost a nine-fold increase in labor-displacing machine-inventing establishments in ten years, it looks as though there will also be a nine-fold increase in unemployment in ten years.

Of course capitalism denies that it desires a workerless industry. The February 1929 Magazine of Business though, will shed some enlightenment on that point. It contains an article entitled, “We Build a Plant to Run Without Men.” It tells of the A.O. Smith Corporation of Milwaukee, a builder of automobile bodies, whole sections of whose mammoth. $8,000,000 plant operate automatically, without any workers at all, and where 10,000 automobile chassis frames a day are turned out by only 208 employees, one-tenth of the previous number. The Smith Corporation engineers have set a completely mechanized, workerless industry as their goal. So have many another of the 17,000 industrial research laboratories already referred to. And so have many more industries, like the electric power and the aluminum industries, wherein sub-stations and distant plants are operated from a central directing point with only a few employees!

All this notwithstanding, capitalist apologists insist in denying that it is trying to operate industry without workers. They declare, without the least betrayal of humor, that capitalism only displaces labor in order to enlarge employment opportunities. In pursuit of this philanthropic end, it sets about devising new machines, new needs, and new industries. One wonders, in this connection, what of old machines, old needs, and old industries? With so much machinery already in disuse, with so many needs already unprovided for, and so many industries already partly or wholly shut down, depriving 15 millions of employment and a livelihood, “new machines, new needs, new industries” look like another one of those delusions worthy of psychopathic treatment.

This becomes more evident when we consider the “new machines, new needs, and new industries” of the past decade—auto, radio, aviation, and television. Let’s throw in frigidaire, for good measure. All of these new devices caused an “unparalleled prosperity’ from 1922 to 1929—just seven short years. They had no permanent, sustaining power. Nor were they unmixed blessings. They were accompanied by an army of technologically unemployed, estimated, before the crash of 1929, at from 1,500,000 to 5,000,000 in number. Virgil Jordan, a well-known statistician, said of the “good times” of this period, in 1928:

“Prosperity…is an illusion created by extraordinary financial conditions, by exceptional activity in production of certain types of goods, by radical changes in the organization and methods of manufacture, by shifts in the methods of distribution, and by shifts in the living habits of the urban population. These changes have been carried forward on a powerful tide of inflation, so that their significance and the problems they raise for the future have been submerged and obscured from public attention.”

Now, the question arises, how come? Why, with the immense increase in the automobile industry, together with the reinforcements caused by the radio, airplane, television, and frigidaire, were there so many unemployed, was prosperity so illusory?

The answer is simple: new machines, new needs, new industries do not simply mean additions to old machines, old needs and old industries. They often mean the absolute destruction, or serious impairment of old industries. Take the auto. It destroyed the vehicle, harness, horse-shoeing, andhorse and mule breeding industries, while seriously depriving the farmer of a market for feed, and at the same time working considerable havoc on the railroads, the end of which is not yet. The radio, in turn, has hurt newspaper advertising, printing, lithographing, phonograph making, amusement, and other industries. Aviation also affects the railroads, with the worst still to come. Also observe what new machines adapted to old industries do. As in the coal industry, they cause over-mechanization and over-manning. And so it goes: these wonders of technology make for far-reaching displacement for which they do not provide equal replacement. In fact, with the tendency toward automatic machinery, with the workerless industry the objective, the new machines and new industries of the future will have new aspects not now discernible on the physiognomies of the old. There will certainly be a new basis for statistical accumulation and interpretations.

Why does techno-crazy capitalism persist in this self-destructive course, for that’s what it’s likely to be, with its unemployment, crises, and dangers of revolt and confiscation? Because, say some, its profits necessitate new investment outlets in new machines, etc. Others like Veblen and Howard Scott say it is because capitalists are stupid, incompetent, and ignorant of the physical laws discovered by modern technology and given uncontrolled sway by profit-making capitalism.

Ludwig Lore, writing in the New Republic, gives a better and more satisfactory reason, as follows:

“Decreased wages and salaries brine about reduced purchasing power. But they are not the initial causes that break down the business cycle at the beginning of a crisis. It is erroneous to speak of sinking buying power when a crisis begins. What changes is the sum total of productivity, which is rising so rapidly that the buying power of the consumer cannot follow. It was Karl Marx who first called attention to this inherent contradiction in the capitalist system. The producer, to survive in the competitive struggle, increases his output and improves the capacity of his machinery. By modernizing labor processes he raises the output and lowers the number of men employed without, however, increasing wages in proportion to labor’s increased productivity, the only method that could keep the purchasing power of the masses 1n step with rising commodity production. Here lies the fundamental cause of every crisis.”

Here we have the reason for techno-crazy capitalism’s competitive necessity. The present-day remedy is increased wages and reduced hours proportionate to the increased productivity of the machine. But that’s impossible under capitalism, with its competition and strife. A new machine-owning, co-operative society alone will free us from techno-crazy capitalism.

Labor Age was a left-labor monthly magazine with origins in Socialist Review, journal of the Intercollegiate Socialist Society. Published by the Labor Publication Society from 1921-1933 aligned with the League for Industrial Democracy of left-wing trade unionists across industries. During 1929-33 the magazine was affiliated with the Conference for Progressive Labor Action (CPLA) led by A. J. Muste. James Maurer, Harry W. Laidler, and Louis Budenz were also writers. The orientation of the magazine was industrial unionism, planning, nationalization, and was illustrated with photos and cartoons. With its stress on worker education, social unionism and rank and file activism, it is one of the essential journals of the radical US labor socialist movement of its time.

PDF of full issue: https://www.marxists.org/history/usa/pubs/laborage/v22n01-feb-mar-1933-labor-age.pdf