Manawatu Daily Times Economic Revolution in America

Manawatu Times, Volume XLIX, Issue 3491, 29 October 1926, Page 6

Manawatu Daily Times Economic Revolution in America

On a number of occasions we have directed attention to the industrial evolution which has been going on in America for a number of years, with results that startled cxpci ts m economics and upset many of their pet theories. Capitalists and trade unionists, industrialists, administrators and students of economics the world over have journeyed to the States to study first hand some of the wonders and achievements of American industrialism.

Writing in the “Lyttelton Times,” Mr A. H. Tocker, M.A., points out the striking contrast between economic America and Europe. “Europe,” he says, “has been unable to extricate herself fully from the depression which followed the war . . . . But America appears unbelievably prosperous enjoying active business, full employment at high wages, good profits and abundant investment, together with a workers’ standard, .of living improving rapidly, and estimated by the League of Nations as 80 per cent higher than that of London, which is the highest in Europe.”

Various explanations of this contrast have been offered, but most have dealt with particular aspects only. Henry Ford has written about the methods of increasing production adopted in his factory, and the same aspect is stressed in the recent and popular “Secret of High Wages,” by Austin, while Lloyd Filnes, in “The Way Out,” gives also much attention to standardised mass production, the elimination of waste and to mass marketing. But it has been left for one of America’s most famous economists —Professor Carver, of Harvard University, to draw attention to the part played by labour in the change, „and to sum up the significance of present developments under the arresting title of “The Present Economic Revolution of the United States.”

Several political revolutions have occurred in Europe as a result of the war, Professor Carver points out, but there is as yet no sign of economic revolution there. Political revolutions too, arc comparatively superficial, easy of accomplishment, and in the long run, relatively insignificant. An economic revolution is slower, deeper, more far-reaching, and is likely to grow from within rather than be imposed from without.

“The only economic revolution now under way,” he says, “is going on in the United States. It is a revolution that is to wipe out the distinction between labourers and capitalists by making labourers their own capitalists, and by compelling most capitalists to become labourers of one kind or another, because not many of them will be able to live on the returns from capital alone. This is something new in the history of the world.”

What Professor Carver means by making labourers their own capitalists, is that to those employed in industry, the prevailing high and rising wages have meant first, a high and improving standard of life; and, second, the growth of savings and investment among the working people. Perhaps the most significant feature of the “revolution” is the remarkable growth of investment amongst the workers, and their awakening to its possibilities. It used to be held that America was the home of millionaires and of the concentration of capital in a few hands. Recent inquiries show that capital is becoming much more widely diffused, and employee stockholders in corporations are achieving a considerable share o£ ownership, and, through ownership, of control over a wide variety of industrial concerns.

The taste of the pleasures of investment and of the returns from investment had led to what Professor Carver terms “the new strategy of labour.” The old doctrine of class war, with all its destructive implications, has been forgotten, and labour has adopted widely the policy of real constructive co-operation with capitalism. Instead of appealing for political action to secure them control over the means of production and exchange, labour finds itself an active participant in a system which enables the workers to produce more and earn more, and which appears to give them a reasonable chance to secure this ownership and control by the surer method of saving and buying it out.