Political Econ of Growth. Paul A. Baran

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СКАЧАТЬ can be realized in the present state of technology. There is ample reason to believe, however, that such cases are relatively rare, and that limitations of the market for individual trademarks, and of capital available to individual firms, account for plant sizes that are less (and frequently considerably less) than what would be rational. The continuous existence and proliferation of small, inefficient, and redundant firms—not merely in industry but in particular in agriculture, distribution, and service trades—result in an amount of waste of human and material resources the magnitude of which can hardly be fully assessed.²⁰

      The multiplication of facilities and the squandering of resources called forth by irrational smallness of enterprises have their counterpart in the waste on the part of monopolistic giants who, shielded by their monopolistic positions, need not bother with minimizing costs or with maximizing efficiency. We have to consider in this connection the large so-called overhead costs of corporate business with their skyrocketing expense accounts, their exorbitant salaries paid to executives making no contribution to the firms’ output but drawing revenues on the strength of their financial connections, personal influence, or character traits making them particularly adapted to corporate politics.

      Nor should one overlook the imponderable but perhaps most valuable potential asset that is being systematically despoiled by monopolistic business: the human material ground up in the degrading, corrupting, and stultifying mill of vast corporate empires, and the ordinary man and woman whose entire upbringing and development are being warped and crippled by continuous exposure to the output, the propaganda, and the sales efforts of big business.²¹

      Even more elusive is the benefit to society that could be derived from scientific research if its conduct and exploitation were not subject to profit-oriented business control or armaments-oriented government control.²²

      This kind of support and administration of scientific work heavily influences its general outlook, its choice of subjects, and the methods that it employs. Demoralizing and disorienting scientists, depriving them of genuine stimuli for creative work, it hampers and distorts the development of science. Determining at the same time the mode of utilization of scientific achievements, it limits severely the benefits resulting from scientific progress. Whether in reference to atomic energy and to public utilities, to substitutions among materials or to manufacturing processes, evidence abounds that the productive employment of technical possibilities is frequently and seriously stymied by the interests of the sponsors of technological research.

      This myriad of more or less readily identifiable forms in which the potential economic surplus hides in the complex spiderweb of the capitalist economy has never been subjected to a systematic investigation, let alone a statistical assessment. Not that economists have not in the past attempted to expose the waste and irrationality permeating the capitalist order. They treated them, however, as imperfections and frictions of the system that could be overcome by suitable reforms, or as anachronistic residues from pre-capitalist times that could be expected to disappear in the course of capitalist development. Lately, as it has grown increasingly obvious that waste and irrationality, far from being fortuitous blemishes of capitalism, relate to its very essence, it has become fashionable to minimize the importance of the entire problem, to refer to it as a “minor matter” which is of no concern to our age of plenty.²³

      The last but by no means least important is the fourth heading in our catalogue of the forms in which potential economic surplus is hidden in the capitalist economy. This is the output lost to society through unemployment of human and material resources caused partly by the inadequacy of coordination of productive facilities, but mainly by insufficiency of effective demand. Although it is very difficult, if not impossible, to disentangle those two causes of unemployment, imputing to each the share for which it is responsible, it is most useful for analytical purposes to keep them clearly apart. The former, usually referred to in economics as “frictional” unemployment, was alluded to above. It appears as displacement of workers occasioned either by shifts in the composition of market demand or by the introduction of labor-saving devices of various kinds, accompanied by discarding of productive plant and equipment. While both the manpower and the facilities involved are capable of being converted to useful employment and thus of being reintegrated into the productive process, in the capitalist economy such conversion, if it takes place at all, proceeds even under the most favorable circumstances with a great deal of delay and waste. Under conditions of rational planning such losses may not be entirely avoidable; they could, however, be greatly reduced.

      More important still, in fact next to military spending the most important single cause for the continuous existence of a large gap between potential and actual surplus, is the unemployment resulting from insufficiency of effective demand. It affects both fully employable manpower and fully usable productive facilities, and, while varying in intensity from period to period, immobilizes a large proportion of the available human and material resources. The impact of this continuously present unemployment of productive potentialities is not adequately gauged by assessing and aggregating the differences between output in times of prosperity and times of depression. This procedure overlooks in the first place that even in most periods of so-called full employment there is not inconsiderable unemployment of labor and productive capacity, and secondly that even boom outputs are lower than what they could be if businesses were not constrained to reckon with bad years as well as with good years and to adjust accordingly their plans for production and investment. Thus calculations based merely on comparisons between outputs in different phases of the business cycle necessarily understate the volume of output lost through fluctuations in the level of employment.

      Yet even such calculations, conservative as they are, present a picture sufficiently illustrative of the volume of potential economic surplus attributable to mass unemployment. For instance, Isador Lubin, then Commissioner of Labor Statistics, United States Department of Labor, stated in his testimony at the Hearings of the Temporary National Economic Committee (December 1, 1938) : “Assuming a working population of the size of 1929, you will note that if you add the employment lost in ’30, ’31, ’32, up to 1938, the total number of man-years lost during that period of time was 43,435,000. Or, to put it in other words, if everybody who had worked in 1929 continued their employment during the past 9 years, all of us who were working could take a vacation for a year and 2 months and the loss in national income would be no greater than it has actually been.”²⁴ In terms of national income valued in 1929 prices the total loss amounted to $133 billion (as compared with the national income in 1929 of $81 billion).²⁵ This unemployment of manpower was accompanied by surplus capacity of productive facilities amounting in the aggregate to about 20 percent “at the peak,” that is, in 1929, and to “more than a third” at the time of the hearings, that is, in 1938.²⁶

      It should be remembered that Lubin’s calculations were based on the assumptions that the working population remained constant from 1929 to 1938 and that its productivity also stayed unchanged during the entire period. In actual fact, as he himself realized, the working population had grown by 6 million, and output per capita would have grown at usual rates given more or less prosperous economic conditions. Taking this increase of employable manpower into account, and considering the rates of growth of productivity that were observed in the ’20s and that could have been expected to prevail in the ’30s, “Dr. L. H. Bean of the Department of Agriculture has estimated that the loss in national income has been $293 billion since 1929.”²⁷

      These calculations were carried to 1938 because that was the time the hearings were held. The conditions of underemployment there depicted prevailed until the outbreak of the Second World War. The war mobilization demonstrated even more convincingly than all statistical computations how large a productive potential had been dormant in the American economy. As is well known, in the years of the war the United States was not merely able to raise a military establishment comprising over 12 million people, to produce a prodigious quantity of armaments, to supply its allies with large quantities of food and other goods, but to increase simultaneously the consumption of its civilian population. The entire war, in other words—the largest and most costly war СКАЧАТЬ