THE PARADOX OF OVER-PRODUCTION
AND ITS RELATION TO WAR
This so-called "paradox of over-production" which figures so largely in the loose discussions of the "post-war" period was in its essence a very simple affair indeed.
Just as the inevitable end of a process of free competition was a consolidation of successful competitors and an arrest of enterprise, so the inevitable end of a search for profit in production was a steady reduction of costs through increased efficiency—that is to say, a steady decrease of the ratio of employment to output.
These things lie so much on the surface of the process that it is almost incredible to us that, wilfully or not, our ancestors disregarded them.
Equally inevitable was it that these necessary contractions of enterprise and employment should lead to an increase in the proportion of unemployable people. Geographical expansion and a rising standard of life among both the employed and possessing classes, together with the stimulating effect of a steady influx of gold, masked and tempered for half a century this squeezing-out of an increasing fraction of the species from its general economic life. There were nevertheless fluctuations, "cycles of trade" as they were called, when the clogging machinery threatened to stall and was then relieved and went on again. But by the opening of the twentieth century, the fact that the method of running human affairs as an open competition for profit, was in its nature a terminating method, was forcing itself upon the attention even of those who profited most by it and had the most excuse for disregarding it, and who, as a class, knew nothing of the Marxian analysis.
We know now that the primary task of world administration is to arrest this squeezing out of human beings from active economic life, by the continual extension of new collective enterprises, but such ideas had still to be broached at that time. The common folk, wiser in their instincts than the political economists in their intellectualism, were disposed to approve of waste and extravagance because money was "circulated" and workers "found employment". And the reader will not be able to understand the world-wide tolerance of growing armaments and war preparations during this period unless he realizes the immediate need inherent in the system for unremunerative public expenditure. Somewhere the energy economized had to come out. The world of private finance would not tolerate great rehousing, great educational and socially constructive enterprises, on the part of the relatively feeble governments of the time. All that had to be reserved for the profit accumulator. And so the ever-increasing productivity of the race found its vent in its ancient traditions of warfare, which admitted the withdrawal of a large proportion of the male population from employment for a year or so and secreted that vast accumulation of forts, battleships, guns, submarines, explosives, barracks and the like, which still amazes us. Without this cancer growth of armies and navies, the paradox of over-production latent in competitive private enterprise would probably have revealed itself in an overwhelming mass of unemployment before even the end of the nineteenth century. A social revolution might have occurred then.
Militarism, however, alleviated these revolutionary stresses, by providing vast profit-yielding channels of waste. And it also strengthened the forces of social repression. The means of destruction accumulated on a scale that well-nigh kept pace with the increase in the potential wealth of mankind. The progressive enslavement of the race to military tyranny was an inseparable aspect, therefore, of free competition for profits. The latter system conditioned and produced the former. It needed the former so as to have ballast to throw out to destruction and death whenever it began to sink. The militarist phase of the early twentieth century and the paradox of over-production are correlated facets of the same reality, the reality of the planless hypertrophy of the social body.
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