[During the open Rebellion of 1942-43 against British-rule,
when socialists were in prison or being hunted and communists
waged their peoples’ war in - companionship with foreign masters,
the doctrine of Marxism ■ appalled me with its wide range of
contradictory applications. To recover its truth and demolish
its untruth became one of my desires. Of the four aspects planned,
economics, politics, history and philosophy, I was halfway through
the economic when the police got me.
Since then, this style of enquiry and expression has ceased to
interest me. No man’s thought should be made the centre of a
political action; it should help but not. control. Acceptance and
rejection are varying forms of blind worship. I believe that it is
silly to be a Gandhian or Marxist and it is equally so to be an
anti-Gandhian or anti-Marxist. There are priceless treasures
to learn from Gandhi as from Marx, but the learning can only be
done when the frame of reference derives not from an age or a
person.
Researchists must still enquire into a man’s thought, parti-
cularly if the man is Marx or Gandhi. The pages that follow
are thoroughly incomplete and no change has been made since they
were written. But error is also a source of knowledge. I only
hope that I have made some significant statements so as to titillate
some man of greater talent and industry into further enquiry.
In any event, these pages, I hope, show the need of an economic
thought different from any that exists today that will turn the
whole world into the gay unity of equal welfare.]
Communism began as a programme of social justice. Its
basis was the achieving of a classless society. Like other pro-
grammes of social justice, it was early faced with greed and
ignorance and the sarcasm of those who denounce everything great
as unpractical and impossible. It, therefore, elaborated a whole
system of philosophy, history and economy. The fact that its
first philosopher was a German of the nineteenth century might
172
ECONOMICS AFTER MARX
have played a part. In any case the elaboration of an entire
system of thought in furtherance of a concrete programme of
human improvement is nothing new to history; Vedism, Buddhism,
Christianity, Liberalism have gone through a similar phase.
What was new in the elaboration of Communism was its claim
to being scientific, its assertion that it was not a moral law but a
causal law. Communism, so claims its philosophy, is a necessary
conclusion of the development of capitalism; the classless society
must come. Around this claim has arisen a whole code of laws.
This code formulated by Marx, has produced such powerful effect
that Communism and Marxism* have become synonymous, that
all Socialists and Communists are in various degrees influenced
by it. A study of this system of laws should preferably begin in
the realm of capitalist economy, to which it is nearest in scope
and where it is likely to have made the least errors. A summary
of the principle and laws of capitalist development as formulated
by Marxism must first be made.
The principle of capitalist development lies in the fact that
labour is a commodity like any other commodity. Capitalists buy
labour in order that they may with its help produce other
commodities for sale. But labour, unlike other commodities,
carries within itself two contradictory values. Every other com-
modity has a single consistent value, the time that is socially
necessary to produce it. Labour has indeed this value, Avhich is
measured by such food and clothing and other requirements of
the labourer as are effective in a given capitalist phase. The
labourer works and is given his feed so that he may work again.
What is given as his “feed” in any particular period is his wages.
This is one value of labour, its exchange value, the value of its
reproduction, its wages. But labour has another value, its use-
value to the capitalist who buys it. The capitalist pays for the
labour power of the worker but receives in return all the goods
produced by it. From among these goods, a part goes towards
the wages of the worker but another remains as the profit of the
[* Sometimes known as Marxism-Leninism, as Lenin was the first man
to put Marxism into the practice of a State apd also made partial additions
to its general theory. ]
capitalist; the labourer’s day is split up into t\yo parts, one of
which produces wages and another profits. Herein lies the source
of all capitalist profits and not in other transactions, for labour,
is the sole creator of value. In his drive for profits, the capitalist,
indeed, tries to make use of machines and improve them in order
that he may turn labour-power to better account. Machines do
not produce better profits; it is mechanised labour that does so.
Clearly, therefore, the dynamic of capitalist development lies in
the contradiction between the value and the use-value of labour,
between .wages and produce. This contradiction is the source of
surplus value, which makes up the entire profits* of the capitalist
system. In the career of surplus value can be discerned a whole
series of laws of capitalist production and development.
Capital leads to further accumulation of capital. Surplus
value or capitalist profits are used for improved machinery and
joint labour, which in their turn produce increased surplus value.
This is the law of capitalist accumulation.
Under capitalism, however, production and circulation cannot
keep pace with each other. More is produced than can be bought,
because productivity of labour and profits continually increase
while wages remain comparatively fixed. There is thus a lag
between the production and the purchasing power of a population,
which causes crisis in industry. This is the law of the periodic
crises of capitalism.
More capital is put into making heavy and intricate machinery,
into building the means of production. This tides over the crisis
for a while, for it does not immediately lead to increased produc-
tion, but it lays the basis for a higher productivity in the near
future. The organic composition of capital increases, the rate of
profit falls, large-scale production increases, smaller capitalists are
thrown out and capitalism changes into monopoly capitalism.
This is the law of concentration of capital or of large-scale and
monopoly production.
*Not to be confused with the profits of the entrepreneur. These are
the sum of the rent, interest and high earnings of the entire system.
, While capital accumulates and concentrates, large sections
are turned into the workless, the reserves of industry, and the
workers themselves become increasingly poorer. This is the law
pauperisation and of accumulation of poverty.
At the same time, the working class is increasingly unified
and becomes conscious of itself, by virtue of the fact that it works
co-operatively and in large numbers in the big-scale monopolist
industries. This is the law of socialisation of labour.
Passing through these laws of development, the contradiction
between the price of labour and its produce assumes sharp forms.
It becomes the contradiction between capitalist appropriation and
socialised production, between old relations and expanding forces,
between monopoly capitalists and an angry, numerous, socialised
working-class. The class-struggle enters its last phase, when the
capitalist husk is burst asunder by the working-class. This is
known as the law of the class-struggle leading to the dictatorship
of the proletariat.
To these laws must be added yet another on the general crisis
of capitalism, when there are no longer any alternating periods
of boom and depression in industry. In this period of general
and continuing crisis, there are imperialist wars, general exhaus-
tion of capitalism and the victory of the world working-class.
This is the law of the general crisis of capitalism leading to im-
perialist wars and the law of the World Revolution.*
In his well-known passage establishing how “the expropria-
tors are expropriated," Marx has in a broad sweep defined these
“immanent laws of capitalist production" as the “centralisation
of capital, — ^purposive application of science to the improvement
* In the elaboration of this law, Engels and Lenin have played a
greater part than Marx. Although twenty six years before the 1914 war,
Engels foresaw “the creation of the conditions for the final victory of the
working-class” through the "general exhaustion” of capitalism in a war,
it was left to Lenin and his theoreticians to deepen the law of the periodic
crisis into the general crisis of capitalism and of the World Revolution.
Should the World Revolution not materialise sixty years after Engels’
prediction and thirty years after Lenin’s and should world capitalism recover
sufficiently from its exhaustion to be able to wage a third world war, what
further laws would be elaborated is difficult to tell.
of technique, means of production— economised— by social labour,
a progressive diminution in the number of the capitalist magnates
and a corresponding increase in the mass of poverty, oppression^
enslavement a working-class which grows ever more numerous,
and ‘is disciplined, unified and organised h}"^ the very mechanism
of the capitalist mode of production.” These Marxist laws of
capitalist development do not merely possess an interest for the
scholar. Although only a few care to read them except as
catechisms and fewer still to understand them as a whole, Social-
ists of all description, ]\Marxists, neo-Marxists, anti-Marxists, base
their thinking and action on one or the other of these laws, parti-
cularly on their source, the general history of the contradiction
between the value and the use-value of labour-power.
A vast literature, confirming or refuting these laws, .has
arisen. It is largely a literature of barren controversy. We must
approach these laws, not to confirm nor to deny, but to understand
the process of capitalist development.
Let us see how far these laws have been unable to include or
have gone against major facts of capitalist development The
first casualty is the law of pauperisation and of accumulating
poverty It would be useless to dem* that, until well after seventy
years of the formulation of this law b}’ Marx and twenty years
after the first formations of the big concentrations of capital, the
proletariat in capitalist countries was not only not pauperised ; not
growing poorer, but was steadily improving its conditions of
lifting. In fact, German economists were able to assert that, in
place of the proletarianisation of the middle-class and the pauperi-
sation of large sections, which Marx had predicted, a steady
bourgeoisification of the proletariat was ta kin g place.* British
economists could point to the black-coated worker. Communists
tried to denj* these facts and formulas by the astrologer s wait-and-
see. There was no such astrological hocus-pocus in Marx’s
formulations. Pauperisation was a necessaxy consequence of
=^The reader must pardon the tkc of these terms which coi^unism
and the German language hare put into the inouth of large numbeis but
which hare no further use except as means of re-education.
176
ECONOMICS AFTER MARX
capital accumulation; accumulating poverty was a necessary con-
sequence of monopoly capital: why should thirty years or even
ten elapse before the necessary consequences appear; there must
be a reason for it. In fact, sectional poverty and pauperisation
did appear in the capitalist countries ten years after the end of
the 1914 war, but it was again partly overcome. To say that
capitalist governments overcame poverty by works-programmes
and war-industries is to state a moral fact, but it is no answer
to the “immanent” ability of capitalism to preserve itself from
pauperisation. Socialist theory must be able to pick up these
loose ends, find them a formula and reconcile itself with facts.
This weakness of Marxist theorj' in explaining the absence
of povert}' under capital accumulation has tended to blunt its
understanding of what is otherwise a correct description of the
industrial crises in capitalism. Industry throughout the nineteenth
centurj' suffered from periodic crises, but, quite as periodically,
got out of them. The main Marxist explanation for these crises
as also for their overcoming lies in the internal structure of capi-
talism, the conflict between the improving means of production
and the constant purchasing power.* Is it not possible that, on
*A vast lore has been written on these crises, their periodicity and
nature, their causes and so forth. Attempts have been made to number
these crises and the regular intervals at which they have occured. We
may also not worry overmuch with the University professors’ characterisa-
tion of these as monetary crises, production crisis, crisis in confidence and
so forth, for such categories express external forms and do not go to the
root of the matter. Marx partly goes to the root when be traces these
crises to the conflict between production and consumption, between the
higher yield of mechanised labour-power and the constant or decreasing
total wages of the working-class. But then Mar.x traces the overcoming
of these crises to the same source which is their cause. He and his disciples
emphasise the period of improvement in the means of production, building
better machinefy and so forth, during which goods of consumption do not
immediately appear on the market but wages are still paid. They indeed
drop phrases about the pressing of the peasantry, improvement in agricul-
ture, enmeshing of the whole world in the capitalist net, but these facts
have not been properly digested in the general Marxist theory on industrial
crises. In fact, capitalist politicians and economists have elaborated a
medicine-book for industrial crises and this is none other than the New
Deal, works-programmes, war-industries and, perhaps in an unwilling
measure, war, followed by post-war reconstruction. Quite a few of these
W'orks-programmes like draining of marshes, fighting malaria, building of
town-halls for assemblies do not at all enter the consumption market but
add to the health and entertainment of the people and also pay out wages
177
fragments of a world mind
this basis, capitalism which is said now to have entered its general
crisis may endure in this state as it endured in its periodic crises
and may possibly, while dying out in one country, reappear in
another ?
As to the law of socialised production, it must be admitted that
monopoly capital and large-scale enterprises have appeared, what
has not taken place is the wiping out of the small capitalist. In
fact, the number of small capitalists, either as share-holders in the
large undertakings or as owner-managers of their own, has in-
creased. In the same manner, although socialisation of labour
in the limited sense of thousands of workers working co-operatively
in a single establishment has taken place, what has not taken place
is their unification. Aside from the technical and managerial
classes, the free professions and the clerical classes, the workers
themselves are cut up into a hierarchy of skilled workers, un-
skilled workers, seasonally employed and their differing wages
have turned the predicted solidarity of the working-class into a
piety-reality.*
The worst trick played by history on the Marxist laws of
capitalist development lies in the fact that the Revolution took
place not in Germany,f where it was expected, nor in anjy other
to the labourers. Even among the means of production, a distinction is
made between the machines to manufacture machines which enter into
consumption at a late stage and the machines which do so earlier. The
industry of housing on a capitalist-cum-municipal _ basis can also tide over
a crisis for some time, as it does not immediately enter the market.
Capitalism is groping towards various combinations of industries which
produce no or slow effect on the market. Unless the undigested facts
of socialist theory on crises are properly understood, we are forced to look
upon the capitalist crises, periodic or general, as upon the simple cold,
highly unpleasant but not fatal.
* Of late, books from the Marxist angle have appeared on the treason
of the technical and free professions, salaried classes, the white-collared
worker. Unable to understand as to why they should ty so numerous or
powerful, Marxism in Europe alternates between looking upon them as
an annexe of the bourgeoisie and wooing them as its own allies.
j For seventy years from the publication of the Communist Manifesto
to the Russian Revolution, Marxists including _ Lenin expected the revolu-
tion to take place in western Europe, particularly Germanp An odd
reference by Marx or Lenin to the possibility of a revolution hrst in
Russia or elsewhere is no more than a side-remark. The prophecy was
about Germany and western Europe. For seventj' ye^s, Marxists me
on this prophecy and, after a brief interlude of the Russian revolution,
returned to it again.
178
ECONOMICS AFTER MARX
developed country of western Europe, but in Russia. According
to the “immanent laws of capitalist development,” the capitalist
husk was to burst asunder where it proved incompatible with the
socialisation of labour and the concentration of capital. How this law
of the class struggle made an arbitrary leap still remains unex-
plained and undigested by Marxist theory. Trotsky’s explanation
that the capitalist chain snapped at its weakest link is indeed a
graphic phrase, perhaps true, but an entire deriial of the communist
teaching on capitalism. Where is the capitalist chain to break?
At its most developed link, says Marx; at its weakest link, says
Trotsky; and, between these two with various other shades, com-
munism will of course always be right. Lenin’s explanation denies
Marx as much as Trotsky’s does. Lenin explains the Russian
Revolution with the active role of the Bolshevik Party. With
a slight change, in that the Party is now called the Party of Lenin-
Stalin, Marxists have memorised this explanation. How this final
activity of the class struggle flew out of its iron laws, nobody
has cared to explain on any scientific basis. In fact, this was
not necessary, for Soviet Russia and the Third International soon
enough turned their attention again to western Europe as the
centre of the World Revolution. The master’s teaching proved
greater than the big fact of the revolution. Marxists are ap-
parently determined to prove, even at the cost of the World
Revolution itself, that humanity will reach its highest foreseeable
development first in Europe.
Marxism is quite accurate in its findings on capital accu-
mulation, correct from one angle on questions of industrial crises,
of monopoly and socialisation of labour, but factually wrong in
the spheres of accumulating poverty, causal class-struggle and the
World Revolution. Whence comes this conflict between its insight
into production and the blind spots regarding circulation? It is
not as if poverty and pauperism did not arise or that the centres
of class-struggle and world revolution could not be located; it is
also not that Marx and his disciples were unaware of the relevant
facts ; it is this that Marxism was not strong enough to digest these
facts and weave them into its general theory on capitalism. Let
us first get at the relevant facts.
179
FRAGMENTS OF A WORLD MIND
Capitalism first arose in England during the second half of
the eighteenth century. The pre-capitalist massings of silver were
due as much to the plunder of Spanish ships and Bengal revenues
as to the throwing out of farmers from common lands in Britain
herself. The first industry to employ machiner)’', which is the
technical basis of capitalism, was textiles. Hardly had this
Lancashire industry begun, when it had to look out for a dynamic
outside its own country and found it in India. British textiles
did not overcome Indian textiles in an economic way. When one
of the British parliamentary commissions pointed out that “the
wares of Lancashire were bleached with the dry bones of Indian
weavers,” it did not mean that Indian artisans could not stand
competition with British manufacturers. Aside from whatever
measures were adopted for direct attack upon Indian weavers, the
East India Company and its servants, by taking over the monopoly
of internal trade in their own hands, were able to dictate what
goods shall or shall not flow in the normal trade channels.* The
victory of British textiles over Indian textiles was political; the
dynamic that Lancashire industry, at its very start, got out of
India was due to Britain’s rule. Once again, as soon as the first
heavy industry of rail-and-engine manufacture is set up in England
around the middle of the nineteenth centurj'^, it has to get an
immediate dynamic from India. It gets that not only by way
of the large numbers of engines, rails and other materials used
in India but also by way of capital investments in Indian railways
which beat’ a guaranteed minimum interest.j This dynamic of
*To suggest that machine-manufactuTers must inevitably drive out
hand-manufacturers is here irrelevant. We are concerned with the course
of history as it has actually developed and not as one or the other theoreti-
cian can conceive it to do so. History's record shows that, unsupported by
British rule over India, not the Indian artisans, but the Lancashire
industry would have died in its infancy. ^ _
f This is perhaps the most remarkable piece of financial transaction in
world history, unless another one is in the making, according to which
British investors got a guaranteed half-yearly interest and, whenever
profits rose above this, got them too. Incidentally, the problem is not
as to whether railway development was a boon to India; the fact is that,
without .British-ruled Indian railways, the British railroad industrj" could
180
ECONOMICS AFTER MARX
Indian railways has continued to act on British engineering in-
dustries, in fact, on all of British capitalism, through manifold
ways. It need hardly be pointed out that the immense growth
of commercial agriculture in India during the latter part of the
nineteenth century and after, in the shape of jute, tea, cotton,
oilseeds and the by-product of hides, pumped a much-needed
impetus into British capitalism, sometimes by way of the German
and Japanese capitalisms. This commercialisation of agriculture
took place on the imperial-colonial level, on the level of pauper-
wages to landless labour as in Assam and poverty earnings to
farmers as in Bengal, U.P. and Bihar, except in the very limited
case of some cotton farmers. Once again when British capitalism
was faced at the end of the 1914 war with what has come to be
known as a general crisis, Indian railroads alone rushed to its
rescue by ordering goods worth a billion rupees and more.f
This rapid survey of British capitalism has brought us to the
conclusion that imperialism and capitalism are of joint origin and
development. A similar development can be traced through the
career of German capitalism, either by way of sharing in the
Austrian, British and French imperial expansion or on its own.*
On the surface, the American development will seem to have
gone a different way. Actually, capitalist development in the
United States has needed an identical imperial dynamic, has made
use of the same elements as Britain. England used already popu-
hardly have gone beyond an infantile stage. Britain did not give railways
to India; India gave Britain her railways and the engineering industry.
History is full of such truths which seem to go counter to outward
appearances.
t Already, in the midst of the 1939 war, orders for locomotives worth
Rs. 42 crores have been placed and, unless something goes wrong, more
will of course follow.
* The commercial activity of the Hansa towns like Hamburg, as of
the East India Company or of the crafts and guilds is pre-capitalism.
Mar.xists emphasise, and quite properly, that capitalism should not be
confused with other forms of exploitation which might bear some resem-
blance to it. German capitalism begins around the middle of the nineteenth
century with the Customs Union and the Listian economy according to
which free trade has meaning only after unequal historical conditions
have been removed, (to the European, German or British, western Europe
is his world), and it really comes into shape with the Bismarckian unifica-
tion of Germany.
181
Fragments of a world mind
lated countries like India for her • capitalist development. These
two elements, a population and a territory, were similarly made
use of by American capitalism. The territory was new and conti-
g-uous and the population was got from Europe. This territorial
expansion took place over the larger part of the nineteenth century.
To understand this, one has only to look at a map of the United
States as it stood at the beginning and as it got to be at the end
of the nineteenth century. All the Mid- Western States, the
Prairie States, the Border States, the Eastern States, a territory
larger than India, were the result of this expansion.f The
problem of man-power for these large territories was also solved
in an imperial way. No less than thirty million European
paupers! came into the United States during the century and
settled in its factories or on its lands. Each fresh batch of
immigrants stood, at least for a generation, in an imperial-colonial
relationship with the older inhabitants, until it got Americanised.
That imperialism and capitalism have jointly developed in capi-
talist history is clearly established by the American case. The
results of this joint development inside the frontiers of what is
now a single country and a single nation are indeed fundamentally
different from those of the British. How American capitalism
overcame its twin is a brave story of the Jeffersons, Jacksons and
Lincolns, but, whether this was due to the new and robust
American nationality or to the fullness of natural resources and a
corresponding labour yield, and whether this may not yet lead
to an imperial-colonial relationship on a world-scale is not within
our present scope. It need hardly be added that Japanese capi-
talism began as a system of industries rapidly built chiefly out
t The old inhabitants of these territories, the Red Indians, were almost
exterminated in wars and skirmishes. For one big chunk, which was
finally acquired by purchase, the United States President had sent his
negotiators armed, quite in the modem style, with two sets of orders,
to buy if possible, else, to wage a shooting war. ^ . ...
JThe story of these paupers goes counter to Marx’s analysis. Until
capitalism arose in England and France, paupers came prindpally “9^
these two countries. Graphic stories are told of how .British men kid-
napped British women in the streets of London and of marriage-a_t-nrst-
sight bargainings on the New Work Harbour. The growth of rapitalism
in England put an end to it. Then came the turn of Germany, Italy and
Ireland before they turned capitalist. Last came the Slavs. Negro labour
had been brought as slaves in the earlier century.
182
ECONOMICS AFTER MARX
of government revenues and it could tlierefoTe wait for two decades
or so before it too went the imperial way.
In face of this wide wealth of facts, how anyone could have
suggested that imperialism is the last stage of capitalism is beyond
comprehension.* Imperialism not only appears at the first stage
of capitalism but goes on developing with it. Capitalism seeks
its external dynamic, one might say, even before it is born and,
unsatiable in this search, it gobbles up one country after another.
First Bengal and the Americas, then the whole of India, and on
to China and Egypt, thence to South America and Malaya and
Java and Burma and the great continent of Africa; the limits of
the world are reached. No single dynamic lasts capitalism for
long; it is soon stabilised and, with an almost magic resourceful-
ness, it uses the old dynamic for the conquest of a new one, Bengal
for United Provinces, India for China and Burma and so forth.
* Lenin has devoted a whole book to the thesis that imperialism is
the last stage of <apitalism. This astounding phrase is meant to convey
the fact of increasing capital investments in the colonies and semi-colonies.
If we limit imperialism to capital investments, what of the factory goods
that capitalism right at its start forced on the colonies and has been doing
so ever since, not to talk of the other tribute of salaries and pensions and
currency tricks. Moreover, even as capital investments go, Britain had
already made the first of these in India around 1850, very much in the
middle stage of her capitalism. Lenin’s tables of statistics of increasing
capital investments in the colonies from decade to decade have no more
than a book-keeping significanc on this issue, for, if colonial investments
have increased, so has capitalist production. Keener students will find
it worth their while to publish the respective ratios of Britain’s total
industrial production to her colonial investments and to her exports in
the decade 1850-60 or 60-70 and also in the decade 1900-10. If Lenin
had made such a study, he would have found that the total volumes of
each of the three categories increase but the ratios are not vastly altered.
Such a misuse of the term imperialism has greatly obscured the fact of
the joint capitalist-imperialist development and, instead of correcting Iklarx’s
theory on capitalism, has further confused it. As a Russian, Lenin was
probably influenced by the fact that his nation’s first contact with capitalism
was by way of west-European investments and he might also have wanted
to give a clever turn to the phrase finance-capital popularised by Hilferding.
Curiously enough, Indian Socialists have also unthinkingly repeated this
phrase. What Lenin and these have probably meant to convey is that
capitalism has already covered the whole world in its net and, therefore,
it must either war and die or find a new dynamic in the more intensive
exploitation of the colonies. It is also possible that, in their anxiety to
discover a proletariat in every country on Marx’s pattern of the class
struggle, they have tended to equate imperialism with large imperialist ,
investments.
183
FRAGMENTS OF A WORLD MIND
Not only does an old dynamic continue to give capitalism a part
of the needed surplus .for home-production; not only does it
produce armies and war-chests; it also yields labour-power, for
instance, Chinese and Indians in Malaya, Indians in East Africa,
Fiji and such far-off lands as Trinidad. If ever the world is able
to look back upon capitalism and its play-time— the nineteenth
century and after, without the heat of battle, it will contemplate
with wonder this cruel and unscrupulous, nevertheless, the cleverest
scoundrel of all history.
But now the limits of the world are reached. Its unsatiable
expansiveness has come up against a dead wall. How -will it,
or can it at all, solve this contradiction between its expansive
need and a limited world ? But that is a question of its recentmost
development and its future, which we will take up at the proper
place. Meanwhile, let us look at another aspect of the career
of capitalism through history, which is sharply related to this
contradiction. Once upon a time, there was but one capitalism
in the world, Britain’s, for the five decades or so of the 18th and
19th centuries. In its herrscher gait through the world, it showed
its superiority in war and its wealth in peace. It was also willing
to help in the birth of cousins. Culture-capitalisms were born.*
By the first decade of our century, there were four such major
capitalisms besides Britain’s, German, American Japanese and
French. This growth of culture-capitalisms has further sharpened
the conflict between capitalist expansiveness and the limited world.
* Like a culture-pearl, Avhich incidentally is not an artificial pearl,
Capitalism is sterile on colonial soil, whatever be the volume of its trade
with or investments in the colonies ; if this were not so, we should have
had a capitalism much sooner in India than we had it in Japan or Germany
or even the U.S.A. Capitalism sells the machines to manufacture machines
to cousins, that is, to such free countries as have the forces for capitalist
growth; one might almost say that it is conscious of pedigree and wants
no nonsense of half-breeds. That these cousins alternate between being
partners and enemies of each other is rather unfortunate; but it is better
than having a litter of children who might all come of age. But this isct
of culture-capitalisms opens out vistas' of enquiry. Is it possible that
any new system of economy that establishes its superiority in war and
obvious wealth has a tendency to produce cousins? Is it possible that the
submerged countries in any world-phase yearn to produce such_ culture
system? Is it finally possible that even opposing systems, for instancy
the socialist to the capitalist tend to produce culture-pearl traits of each
other ?
184
ECONOMICS AFTER MARX
We are thus living in an age which has come to be known as the
epoch of imperialist wars and which, with greater appropriateness,
can be called the epoch of capitalist wars. Can capitalism scotch
the birth of new culture-cousins, can it lay low some of its existing
ones, can the world, instead of going socialist, remain capitalistic
by a process of stagnation or see-saw, are some of the intriguing
questions of future development. For the present, let us weave
the results of our enquiry into a correct theory of capitalist
development. We have found the fact of the joint capitalist-
imperialist development. We have found the fact of the growdh
of culture-capitalisms. We have finally found the fact of multi-
plying capitalisms within a territorially limited imperialism.
The question as to whether capitalism is at all possible without
imperialism may be briefly answered with the strict understanding
that, in history so far, there has been no capitalism without im-
perialism and that, therefore, it relates to the problematic future
and asks for prophesy. Clearly, capitalism, depending upon an
exclusive internal dynamic, theoretically improbable in a vast
country with a vast population, will have to bear two burdens
at the same time, the joint capitalist-imperialist ^burdens. Most
likely, it will crash under these burdens; most certainly, it will
cause an impoverishment on a hitherto unknown scale.
Let us now reconstruct the theory of capitalist development.
Marx’s initial fallacy was to have examined capitalism in the
abstract, to have wrenched it outside of its imperialist context.
Marx was not unaware of imperialist exploitation and his disciple,
Lenin, was even more keenly aware of it. But imperialism is
with either a tumour of capitalism, an odorous after-growth and
this has at best awakened an unintelligent concern for the colonial
races. Marxism has therefore not been able to give a consistent
theory of capitalist development. Its picture of capitalism is that
of a west European entity, with the later additions of the American
and Japanese ones, more or less wrenched out of the world, more
or less developing internally. All the dynamic of capitalism is
placed within its internal structure, in the contradiction between
the value and the use-value of labour-power, between the working-
185
KRAGilEXTS OF A V.'OEI-D
class and the capitalist-class of the self-same structure. Slarx’s
capitalism -was that of a self-moidng- west-European circle, no
doubt causing- great repercussions in the outside -vrorld, but the
principle and lav,'S of its ov,-n movement vrere exclusivel_v internal.
Marxism to this da}- remains stuck in this picture, no doubt
formulating lavrs about these outside repurcussions, but is v,-holl}-
unable to state the basic interacting principle of the tK'o, internal
and external, movements of capital. Socialism must forever
shatter this unreal Marxist picture. In its place must arise a
picture of two circles, one placed inside the other, the inner circle
representing the free capitalist structures with their d}'namic in
the contradiction bebveen capitalist profits and mechanised labour,
the other circle representing the colonial econom\' of the rest of
the world with its dj-namic between imperial exploitation and
colonial labour, the rim of the inner circle possessing an enor-
mously porous capacit}' to suck into itself the dj-namic of the outer.
This is the onl}- way in which we can join up the capital-labour
d3'iiamic with the empire-colony dynamic and arrive at a consistent
understanding of the development of capitalism.*
The Communist theorj' of capitalist development starts -with
the contradictio?! between the value and the use-value of lahom
and with the surplus value thus generated. The career of this
surplus value reveals the further laws of capitalist development
All this needs to be restated, in the light of our investigations,
both as to labour’s value and its use-value. Labom is not an
abstract something, although Marx made it so. In spite ot their
horror of idealistic concepts. Communists have continued to treat
labour as an ideal, abstract entit}*. Actually, labour under capi-
talism has shov.-n two forms, which differ so -^ridely irom each
other, that lumping them up imder one category can never give
* Sonie persons will here remark that the two dynamics are present
in Marxist studies of capitalism. Nobody questions that. The issue is
whether the tivo dj-namics are so inter-^nnected pd the basic laws or
this interconnection so discovered as to give a consistent understandmg or
the world. It is this interconnection that socialism must stuay. tor a
type of intellect which can only be satisfied bj* crude evalu<iiJons, Ct i
be said here that, among- all other Europeans, Karl Marx is the g-ea
economist of European history. But -we must not be satisfied -wii-h tnat,
for we need the economics of vrorld history.
186
ECONOMICS AFTER MARX
US a proper understanding. Labour has been either imperial or
colonial and there have been vast divergences in their values. It
is for these divergences that communism has had to evolve the
concept of the socially effective requirements of labour. But its
basic concept of the necessary requirements of labour* has stood
* University economics has tried to understand the present distribution
of wealth among various countries of the world and is preserving this
understanding with the help of a few concepts. Let us examine the major
concepts.
(a) Necessary Requirements of Labourl The requirements of labour
are supposed to vary from country to country. Colder climates like those
of England and Germany are believed to necessitate richer food, better
housing, more numerous clothing and so forth than tropical climates like
in Africa and India. As a result of these higher calories of food and
so forth, labour in colder climates is also believed to be more productive.
Thus, the teaching has sprung up of the greater productivity as also the
greater requirements of labour in colder climates. This teaching is wholly
erroneous. There is no reason why the German should not be able to do
with the food of the Tibetan and carry a charcoal-firestove bound to his
back or live the winters of his entire life-time in a single Eskimo coat.
There is likewise no reason why the Indian can naturally labour without
electric fans and air-conditioning and fruit juice and such like nourishing
food to fight the rigours of a tropical sun. If climate has any economic
relevance, the coal fire and central heating of colder climates has its
opposite number in the fans and air-conditioning of warmer climates, the
heavy meat-and-drink diet, in the fruit-and-milk diet, so that one might
legitimately say that the requirements of labour in warmer climates arc
naturally higher than those in colder climates. But, to be able to say
that, one would require an excess of political power in warmer climates
as compared to that in colder. In fact, Europeans have in the past been
able to do with Eskimo coats and without baths and the like. Quite
obviously, therefore, there is no such thing as the necessary requirements
of labour; there are only such requirements as varying political fortunes
have bestowed upon this country or that. The Indian peasant who is today
supposed naturally to sleep in the open and work may as naturally be
supposed, in a different political climate, to require for his labour a pucca
house lighted and ventilated by electricity. This brings us on to the
question of what labour produces.
(b) Productivity of Labour: The teaching that credited labour in
colder countries with a higher productivity by virtue of the climate itself
is so patently untrue that it has almost been given up. It is now clothed
in different garments. Such concepts as the lack of proper food or of
training and skill are introduced to explain the low produce of colonial
labour. Indian economists and businessmen make free use of these con-
cepts. When, for instance, the low yield of the Indian steel worker is
compared with the high yield of the British steel worker, this is naturally
put down to the ill-fed and ill-trained condition of the former. Tlius
do our capitalists and economists hide their own shame and dishonour.
For the west-European capitalist cconomj’, Karl Marx proved conclu-
sively, that the concepts of skilled and unskilled labour are highly
transitory, what is skilled today ma3' become unskilled tomorrow and the
187
FRAGMENTS OF A WORLD MIND
labour that can be got dirt-cheap todaj- mas' require good rrages tomorrow
Let us look at our own_ nckshaw-driver. It is difficult to imagine a more
exacting or a more skilled labour. In like manner, if there were =ome
way to me^me the labour power spent b3- the Indian metal-worker'' and
by bis Bnbsh opposite number, it will be found that the former has
^ e.xacting labour. The economic fact is that the
ill-fed Indian worker or peasant has to do as exacting a labour, in <: aria-haspopup="true" class="goog-spellcheck-word" id=":dh.2679" role="menuitem" span="" style="background: yellow;" tabindex="-1">ome
rases even more, and spend as much of his muscle-power as the better-fed
British worken Is it then the higher skill of the Eurojiean labourer that
does the trick? We have alread3' commented upon the skill of the rick-
shaw driver, than which there can be nothing higher in the steel-industry.
The motor or bus driver in India is certainly as skilled as his opposite
num^r in Europe. Perhaps what is meant is a particular tj-pe of skull
required for a particular tj’pe of machinerj-, there being no suggestion
that anyone is higher than the other. Even here, it will be difficult to
prove how the skill of the rivet-driver in our country differs from that
of the ^British. kkTiat may be possible is that adaptation to a particular
kind of machinery' may require a few years so that labour that has the
earlier 'run enjoys a short-lived advantage. But conditions are soon
equalised. Therefore, the concept of ill-fed and ill-skilled labour as an
explanation of the low produce in our industry uses as much, it not more,
of muscle-power and skill as labour elsewhere. Is it then their own
incompetence which Indian capitalists seek to transfer to our labour?
(c) Capitalist Enterprise: Capacity to mix in the most pr^ofitable
proportions the three factors of production, land, labour and capital and
the readiness to take risks or to break out into une.xplored regions of
technique and industry are regarded as a part of the entrepreneur’s skill
in text-book economics. Aside from the question why this skill should
get higher profits than, say, the skill of the school-teacher, it would be
■whollj' absurd to suggest that the entrepreneur’ s skill in the more
important countries is of higher or lov/er orders. The Indian capitalist
is as skilful in the selection of sites for his industries and in marketing
as the European, if anj'thing, he is even more skilled in the manipulation
of labour. He can also take enormous risks as evidenced bj' his bold
speculations. This teaching of enterpreneurs skill, whate\-er may be its
role in the internal economy of a country, has absolutely no meaning when
applied to distinguish one important country from another. W'hat has
meaning is another concept, a country’s total economic structure which
is naturallj' dependent upon its politics. This explains that the Indian
capitalist, while he takes the most fantastic risks in commercial specula-
tion, is wholb' crippled v.hen it comes to brealdng out into new techniques
and industry. On industrial risks, he is as dishonourable as the tortoise,
probably because he knows that the moment he takes out his head he will
be decapitated. It is to this dishonour of a colonial economic structure and,
not to the supposed lower 5'’ield or the lower needs of our labour nor
to entrepreneur’s skill, that our low economic productiviri' should be
traced.
(d) National Resources : Attempt is often made to refer to a countrj- s
natural resources to explain and justify what in imiversity economics is
known as the geographical division of labour. For inst^ce, the prcicnce
of humidity in the Lancashire atmosphere and, therefore, ilMchestra
textiles are brought in some sort of a mutually beneficial connertion^with
the cottton growing black-soil of Maharashtra. The actual use or artificial
sprays in Indian textile mills has completely busted up this connection.
188
ECOXOMICS AFTER MARX
for the cost of these sprays is not even an infinitesimal fraction of the
earlier two-way freight charges. This does not however mean that there
is no such thing as differing natural resources. It is to these resources
that the United States owes, in part, its preponderant position in the world;
with six per cent of the world’s population, it controls nearly tiventj'five
per cent of the world’s resources. Here again one has to be very careful.
The factor of scientific inventiveness can almost equalise the differing
natural resources. The present estimate of a countrj'’s resources is made
on basis of materials such as coal, iron, petrol, water-power and so forth,
which have already acquired key-importance. But one can depend on
science to produce petrol out of coal and sugar out of wood and, if these
ersatz industries may with some reason be regarded as a waste in the
perspective of world-economy, there are remarkable new inventions such
as plastics or electronics which open out the prospect of wholly new
industries. Firmly entrenched vested interests of iron and steel in the
already industrialised countries may make it impossible for the plastics
industry to grow, whereas another country with less resources in iron may
develop this nhv industry with great profit to itself. Scientific inventive-
ness can thus add to the great varietj' of key natural resources and equalise
the differences among various countries. No doubt, applied science will
have to be more alert and alive and diversified as between one country
and another than it has so far been; it must not blindly follow already
explored lines. In this way, differences in natural resources can be
equalised and a countrj', poor on, the present showing, may even aspire
to gain a lead, however short-lived, over others. In order tliat we can
have a really beneficial world-trade and obtain a true teaching of the
geographical division of labour, science must get an unfettered scope in
various parts of the world and also make an intelligent, human use of
its possibilities. Until this is done, text-book teaching on natural resources
must be viewed with suspicion and be looked upon as_ a justification of
existing geographical division of labour, that is, of the imperial structures
on the one hand and colonial structures on the other.
We have found that the concepts of the nccessarj' requirements of
labour, of the productivity of labour, of capitalist skill and of natural re-
sources, when used to distinguish one country from another, are either
meaningless or harmful to proper understanding. To understand world
economy, as it is and as it has travelled through the past two centuries,
we would need such concepts as the politically effective requirements of
labour, the productivity of the total economic structure, the imperial-
colonial division of labour.
What we have hitherto had as the science of economics is nothing
else but the rules of accountancy, industrial management, trade and banking.
The science of economics is yet to mature. This is further illustrated
b 3 ' the pitiful use that economics makes of statistics.
Fairlj’ copious statistics are now available of the total annual pro-
duction in various countries, their national incomes, foreign trade, capital
investments and so forth. What docs economics do with them? It just
establishes surface ratios. For instance, we know that, in a normal year,
20 per cent of Britain’s production enters into e.xport trade, around 3 per
cent comes to India, the total of investment dividends and home charges
going out of India do not make more than 2 or 3 per cent of Britain’s
national income. According to these surface calculations, India contributes,
at best, a _S per cent to Britain’s national income. The politician, Mr.
Churchill, is nearer the truth than these calculations of economists are.
189
FRAGMENTS OF A WORLD MIND
when he puts down India’s contribution to Britain’s national income around
15 to 20 per cent. In fact, it might even be more. For Mr. Churchill
IS aware that money-expressions of economic values greatly obscure the
dynamics that go on underneath, that the loss of dynamic in one region
leads to losses m other regions and so forth.
Let us evaluate the statistics of India’s foreign trade as the science
of eronomics ought to. We would find that, in a normal year, 5000 crores
of labour-hours spent on our farms and fields are exchanged for 250 crores
of labour-hours spent in British factories. The German and Japanese
factories have also their share. These calculations are easily made. If,
out of our production estimated at Rs. 2,000 crores in a normal year’
Rs. 100 crores worth of agricultural goods enter our export trade, l/20th
of our entire population, that is, 2 crores of men have been at the job of
producing these exported goods. For the purpose of ensuring complete
comparison, the entire population and not the working population is here
regarded. At the estimate of 2,500 labour-hours per man per’ year, we
get a total of 5,000 crore labour-hours spent on the production of our
exported agricultural goods. Likewise, if out of the British production
estimated at Rs. 4,000 crores in a normal year Rs. 100 crores worth of
industrial goods enter the export trade, l/40th of the British population,
that is 10 laklis of men have been at the job of producing these exported
goods. Thus 250 crores of labour-hours are spent on the production- of
these industrial goods imported into India. This is the real story, which
money statistics of India’s foreign trade are so shy of revealing, that the
labour of 2 crores of men is exchanged against that of 10 lakhs of men,
5,000 crores of labour-hours are exchanged for 250 crores of labour-hours.
It will not do to summon the exploded concepts of labour productivity or
of natural resources to explain this fantastic exchange. The concept of
the imperial-colonial division of labour, of the productivity of the total
economic structure, alone can explain it. Behind this fantastic exchange,
lies the history of layer upon layer of saved labour from generations of
tillers and miners of India, China, Java, Malaya, Africa, South America
and other lands, which has continually been converted into the gigantic
machines of England, Germany and Japan.
How then to disentangle the two surplus values, that which capitalism
extracts from labour in its home factories and that which it extracts from
colonial labour? There is so much of history, so much of continually
changing dynamics wrapped up with this problem that one despairs of
evolving an adequate mathematical formula. And yet, cannot perhaps this
terrific flux of surplus value be grasped by a simple formula, if we bear
in mind that labour’s use of muscle-power and sldll is the same all the
world over and, granted equal conditions of technique, would yield equal
produce. In fact, university economists who believe in exchange of equal
values should have no difficulty in accepting this formula. Let us then
convert the world’s entire production of a year into the currency of any
one country. Care should be taken to convert not the nominal values, but
the real values. We may then divide this production equally among the
world’s working population. For the rough calculation that follows the
world’s entire population is taken into account. In our own
this would roughly work out at Rs. 100 per head per year Whoever
receives less than this as his income and to the extent that he does so,
man, woman, or their child, is a contributor to the surplus value of capi-
talism ; whoever receives more than this, and to the exteih that e oes
so, is a receipient. This will perhaps show that nearly 99 per cent ot
190
ECONOMICS AFTER MARX
in the way and prevented a richer understanding of the newer
and correct concept. There are no necessary requirements of
labour, at least, they have no economic relevance except in periods
of famine. Human labour has shown a remarkable tenacit}’- to
live and U^ork and its requirements have varied from the minimum
of 2 annas a day for colonial labour to that of Rs. 4 a day for
imperial labour. This shows that requirements of labour are
dictated, not by nature or physique, but by history.
Historical development has dictated that a colonial labourer
shall keep himself upon the brink of starvation and work, while
nature has shown its marvellous elasticity in how very little is
needed to keep a man alive and enable him to turn up for work
day after day. We thus find that there are two distinct values
or wages of labour, those effective in the imperial countries and
those effective in the colonies. This distinction between imperial
labour and colonial labour and their respective wages is of the
utmost importance for a proper understanding of the source of
surplus value. Likewise, the concept of the use-value, the pro-
duce, of labour remains abstract and meaningless unless it is
understood in the context of joint capitalist-imperialist develop-
ment. In the current produce of labour in west-European
factories appears the saved labour of many generations of colonials.
Economists, including Communists, are wrong in crediting this
entire produce to imperial labour and in using pompous phrases
about the higher productivity of labour in Europe as compared
colonial labour and not more than 10 per cent of imperial labour is the
victim from whom capitalism extracts its profits, although, perhaps another
10 per cent of imperial labour lives on the margin. The accountants,
misnamed economists, will perhaps wilt at this calculation. They might
suggest that this calculation steps up India’s production exactly double
by a magician's trick and it makes appear two where there is only one.
They have to be reminded that the one their eyes are unable to
see has from generations been crossing India’s frontiers and appearing
in the product of west-European and Japanese factories. They have also
to be reminded that the spending of muscle-power and skill is the same
all tlie world over and, if it today yields less in India, China or Africa,
that is because its previous yields of many generations lie congealed in
the machines of other lands.
We can now define surplus value. Labour, whether of the peasant
or the factory worker, creates surplus value to the extent that its earnings
fall below the average per worker world production of its time.
191
FRAGMENTS OF A WORLD MIND
to Asia or Africa. Labour, on the whole, uses the same muscle-
power and skill everywhere and, what appears as the higher produce
of imperial labour, is directly due to the many generations of
imperial-colonial division of labour in the world. One might
almost say that the ghosts of hundreds of millions o? colonial
toilers are invisibly moving the machines in imperial factories.
The highly elaborate machinery, and its continuing improvement
in capitalist countries, is due, in large part, to the surplus value
created on colonial firms and mines. The continuing use of the
productive capacity of these factories is also due, in large part,
to the vast masses of colonial toilers who buy their produce. In
this welter of a current production that carries with it many
entangled skeins of history and of two distinctive values of labour,
the old formula that capitalist development has proceeded with
the contradiction between labour’s wages and its produce has
become meaningless.
If capitalism has extracted surplus value from its home
labourers by paying them' less than what they produce, upon this
extraction has continually acted the far greater surplus value
derived from colonial toilers. Do the immensely rich persons and
the vast middle classes of England and Germany, receive surplus
value from home-labour or from colonial labour and in what
ratios ? Does not imperial labour itself, at least some of its better-
paid ranks, receive a large measure of surplus value extracted
from colonial labour? There seems to be only one way to get
out of this labyrinth. We must forever abandon the habit of'
examining a country’s economic structure as a self-moving entity ;
we must therefore abandon the Marxist understanding of capi-
talism as a self-moving west-European entity. Capitalism from
its origin to its xecentmost development has moved mainly on the
imperial dynamic. So that we may evolve a formula which may
grasp at the same time the internal and external dynamics of
capitalism, we have to give up the idea of an isolated produce of
labour within a single economic structure and replace instead the
concept of the world’s total production averagely distributed over
its working population. Thus, the contradiction shall be, not
between labour’s requirements and its produce, but between the
192
politically Qff . 4PJ,
va7ue ^^°^»ction of?/ „? (?oes\
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of tu "^dy /e ^ primary opt, f ^‘^c/7 lo^^ ^ }^y broad
^4suZ"'f'’ =12™'
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193
FRAGMENTS OF A WORLD MIND
this instruiDent of an intcnvovsn inner and outer
dj naniic, m e are in a position to understand tVie other appearances
of capitalist dei elopnient. In particular, the high capitalisation
of west-European industn- is made intelligible. This industry’
has not only continuall}' got the larger part of its capital from
overseas profits, but it has continually found overseas outlets for
its produce in goods as well as its capital acounulations. Thanks
to the fact that corresponding industries could not be established
in the major part of the world, west-European industry' could
capitalise itself so higlilv, could become unmistakably monopolistic.
The west-European population could never have borne the burden
of this heai”}’ capitalisation, could neither have created it nor
carried it through, not even if they could have distributed their
produce on a communist basis.
Just as this hea\y capitalisation is the outcome largely of
overseas d3’namic, the overcoming of the periodic crises is to be
traced to the same source. To say that industrial crises are caused
by the lag between a people’s production and their purchasing
power or that they are overcome by inventions and heSjWer
capitahsation is to state some half-truths and ourivard appearances.
Industrial crises, in addition to being a partial result of the capi-
talist distribution of internal incomes, have more largely been due
to tlie time-lag between the exhaustion of an old imperial d^mamic
and the discover}* of a new one. An old technique of producing
goods with a given o^'erseas area for imperialist exploitation tends
to produce crisis, until a new overseas area is conquered to enable
the use of a new invention.* Thus wzs it possible for capitahsm
* If an attempt were made to pair off Stephenson’s steam-engine or the
Bessemer process or the internal comb'astion engine with such events as
the conquest of Bengal or the opening of the Suez canal and the consequent
commercialisation of Indian agriculture or the conquest _ of Atrica. the
results would prove that a crisis set in largely as old colonial areas started
proving inadequate and capitalism got restored to health with pey political
or economic ^annexations. Incidentallj*, this _ theorv* of cypitahst
might mean that such hea^w capitalisation as in_ European industry wo*a-d,
even under socialist conditions, be impossible without imperialist exploita-
tion. We would consider this question later. _
P;S . — 1 have now come to belie\*e in the utter impossibihty m suca
heai*y capitalisation for the whole world, not alone because of Jie ua-
194
ECONOMICS AFTER MARX
to survive its first crisis and its later periodic crises, for, the inter-
nal purchasing power could in no event have sufficed for its
produce. Thus is it that, with the complete conquest of the world
and the impossibility of a new imperial dynamic, capitalism has
entered the phase of general crisis. It is wholly unable to get
out of this phase. Whether it will as a result break asunder or
stabilise itself at low levels of wealth will be considered later.
Capitalist crises are often sought to be understood in terms
of the rise or fall in the rate of interest. As an outward ap-
pearance, it is incontestable that crisis is a period of very low
outturns on capital, that is, almost negligible rates of interest,
while boom is a period of high outturns. It is also true that, after
a period of abnormally low outturns, a new invention for the
production of goods used to bring a higher yield on capital. A
new composition of capital and labour took place. But this is
merely touching the surface of the problem of crises or, even, of
the rate of interest. Going deeper, we are offered such explana-
tions as that new inventions caused a fall in the costs of production
and the price of goods and, with the increase in population, this
gave higher profits to capitalists and thus restored equilibrium.
This is yet not a full explanation. Each boom-making utilisation
of new inventions and the consequent fall in the costs of produc-
tion was possible only with the fresh markets of large overseas
populations for trade as well as investments. It was this that
restored capitalist equilibrium and profits and the new restorations
tended to be on lower levels of interest. With the possibility of
such new restorations now blocked, capital is faced with the
problem of a zero or a minus rate of interest. Capital is faced
with its own extinction. This is the' problem of the general crisis
of capitalism.
While capitalism has progressed through periodic crises in
its homelands, it has brought devastating paupery and increasing
poverty to the colonies. Landless and starving labour in agricul-
availability of imperialist exploitation, but also because most of the
retarded two-thirds of the world possesses a tremendous density of
population. 1952.
195
FRAGMENTS OF A WORLD MIND
With this instrument of an interwoven inner and outer
dynamic, we are in a position to understand the other appearances
of capitalist development. In particular, the high capitalisation
of west-European industrj^ is made intelligible. This industry
has not only continually got the larger part of its capital from
- overseas profits, but it has continuall}'^ found overseas outlets for
its produce in goods as well as its capital accumulations. Thanks
to the fact that' corresponding industries could not be established
in the major part of the world, west-European industry could
capitalise itself so highly, could become unmistakably monopolistic.
The west-European population could never have borne the burden
of this heavy capitalisation, could neither have created it nor
carried it through, not even if they could have distributed their
produce on a communist basis.
Just as this heavy capitalisation is the outcome largely of
overseas dynamic, the overcoming of the periodic crises is to be
traced to the same source. To say that industrial crises are caused
by the lag between a people’s production and their purchasing
power or that they are overcome by inventions and hea.vier
capitalisation is to state some half-truths and outward appearances.
Industrial crises, in addition to. being a partial result of the capi-
talist distribution of internal incomes, have more largely been due
to the time-lag betw'een the exhaustion of an old imperial dynamic
and the discovery of a new one. An old technique of producing
goods -with a given overseas area for imperialist exploitation tends
to produce crisis, until a new overseas area is conquered to enable
the use of a new invention.* Thus was it possible for capitalism
* If an attempt were made to pair off Stephenson’s steam-engine or the
Bessemer process or the internal combustion engine with such events as
the conquest of Bengal or the opening of the Suez canal and the consequent
commercialisation of Indian agriculture or the conquest _ of Africa, the
results would prove that a crisis set in largely as old colonial areas started
proving inadequate and capitalism got restored to health with new political
or economic /annexations. Incidentally, this; .theory' of rapitalist crises
might mean that such heavy capitalisation as in European mdustry would,
even under socialist conditions, be impossible without imperialist exploita-
tion. We would consider this question later. _
p,S. — I have now come to believe in the utter impossibility' ch such
hea\'y capitalisation for the whole world, not alone because of the un-
194 -
ECONOMICS AFTER MARX
to survive its first crisis and its later periodic crises, for, the inter-
nal purchasing power could in no event have sufficed for its
produce. Thus is it that, with the complete conquest of the world
and the impossibility of a new imperial dynamic, capitalism has
entered the phase of general crisis. It is wholly unable to get
out of this phase. Whether it will as a result break asunder or
stabilise itself at low levels of wealth will be considered later.
Capitalist crises are often sought to be understood in terms
of the rise or fall in the rate of interest. As an outward ap-
pearance, it is incontestable that crisis is a period of very low
outturns on capital, that is, almost negligible rates of interest,
while boom is a period of high outturns. It is also true that, after
a period of abnormally low outturns, a new invention for the
production of goods used to bring a higher yield on capital. A
new composition of capital and labour took place. But this is
merely touching the surface of the problem of crises or, even, of
the rate of interest. Going deeper, we are offered such explana-
tions as that new inventions caused a fall in the costs of production
and the price of goods and, with the increase in population, this
gave higher profits to capitalists and thus restored equilibrium.
This is yet not a full explanation. Each boom-making utilisation
of new inventions and the consequent fall in the costs of produc-
tion was possible only with the fresh markets of large overseas
populations for trade as well as investments. It was this that
restored capitalist equilibrium and profits and the new restorations
tended to be on lower levels of interest. With the possibility of
such new restorations now blocked, capital is faced with the
problem of a zero or a minus rate of interest. Capital is faced
with its own extinction. This is the problem of the general crisis
of capitalism.
While capitalism has progressed through periodic crises in
its homelands, it has brought devastating paupery and increasing
poverty to the colonies. Landless and starving labour in agricul-
availability of imperialist c.^ploitation, but also because most of the
retarded two-thirds of the world possesses a tremcridous density of
population. 1952.
195
:XTS OF A WORLD iriND
tare hzs claimed an increasingly higher percentage in the total
population. Because of their basic misunderstanding- of the
dy i: Sm iC ox capicalism. ^larxists have looked lor increasing
impoverishment among imperial labour, vrhereas they should have
looked for it in colonial labour. The histoxv' of capitalist develop-
ment is the history- of the increasing poverty of colonial masses
and their reduction into starving and landless labour.*
The worst sufferers under capitalism are the colonial masses.
Presuming the validity ot the Communist law of class-struggle,
there is obvious need to change its basis. Xot the worldng class
in capitalist countries, but the colonial masses are the princiosl
* J~zr.( 2 l£izbz'jT
Indian agricalture has risen frcm beine less than
ZCO _cf eacii iKO k agricnlWrists at the end of the last centnr:.- to neariv
-M in ^ch 1C'>3. i his is the most hnportant result of the ccnnnerdalisatiGn
of agriculture. Xe".‘ertheles$, men can stiit talk that India has been
enriched unrcugh ccmme.'rial agriculture. It would be hard to Snd a
more obvious stream of blood that has Sown from a huge mass of popula-
tion to a foreign economy or to a section in its own. Tne receivers of
this stream alone can talk of the enriching of 'the people free: whom it is
talien. mere is no greater collapse of hum.an intelligence than when an
Indian or any ether colonial repeats parrot-ISie the Ifarxist formtda that
capitalism was at one time progressive but has now ceased to be so.
Capitalism has at no time been progressive to the colonial masses; it has
increasingly vrasted their economic and spiritual welfare. If only so-me one
with s:.-mpathy and a historical sense could write “the Kistety of Colonial
Labour in India”, it would not only be a service to knowledge but would
read like a thriller. The materiais of such a history may have to be found
in the indenture records of such far-ori lands as Fiji and Trinidad; th^
vriii teve to be ferreted out of the numerous British commissions and
reports; old budgets and prices will have to be discovered and. in part,
the;.- may have to be reconstructed out of such evidence as is available
frem men who are before our eyes fading into skeletons. This might take
a whole lifetim.e. but it will be a great w-ork. Such a history will relate
the rec-eated auctionings of Bengal lands by Hastings, the speedy reduction
of craftsmen into landless labourers, the cry for salt and oil. labour's work
on rail embanlunents and roads to be followed b;,- successive gazes cn
its hc-eded fields and its own creation, the story of its fascinating women
Guickiy fading into wvinkles and gawlnness or o* a rare Sower picked vp
by the zamindar's son and tl:e indigo saheb only to be thrown away, tae
occasional revclts, the resignaticn and pain ot indenture slaves c-n ramsnackle
ships and cn lands thousands of miles atvay. the arrival of jute and tea
and cotton with -Bessemer and the Suez canal wttn^ them — fee piteous cry
for food, famines, the stiSed moan, the wondrous victory ^of rite Icfn doth
over naJiedness. the background o; the huge lactones tn loreign lanos s^d
tlisir' sos.vrn5 in SomLjs'v. CslcnttH. sun i2kcr toxviis 'tnrousn dl
story of vanishing fc-cd and vanishine doth, rnnnmg Ime a red thread, tim
disgrace of caste and the songs of Paltu ana other Bnagats feat spOKe of
the dissolving hatrainess in the Great Aosolute,
196
ECONOMICS AFTER MARX
grave-diggers of capitalism. Imperial labour can at best be an
ally of colonial toilers in the destruction of capitalism. The class
of colonial toilers’*" pours its life-blood into the capitalist system
from its birth, carries it along through its various phsases and is
itself steadily impoverished, until it reaches a stage when its own
extinction spells the decay of capitalism, while its purposeful rise
into manhood ushers a new world. Whether the class of colonial
toilers will do its work well or ill, whether it will allow itself to
stay in decay or rise into manhood, will be discussed under the
recentmost development of capitalism. Suffice it here to say that
the future of capitalism depends not so much on the behaviour
of labour in capitalist countries as on the behaviour of colonial
masses. The student of capitalist future will have his eyes pre-
eminently on the political action of colonial toilers.
The Russian Revolution fits in very well with this theory of
the class-struggle. As a country which by no means formed part
of the inner capitalist circle of world-economy but was being
gradually brought into the outer colonial circle of the west-
Europeans, its semi-colonial toilers were yet powerful enough to
overthrow the foreign and native systems that spelt their ser\’itude.
The capitalist chain snapped where the colonial masses supplied
their strongest link. Those desirous of seeing the capitalist chain
break again will do well to look for the now strongest link in the
class of colonial toilers. Such a breaking may perhaps usher in
a real new world, as the snapping link is now no longer semi-
colonial but wholly colonial and vitally necessary to capitalist
continuance.
Before we go on to consider the recentmost development of
capitalism, let us ask ourselves how Marx could have made an
inadequate use of his own instrument and have considered capita-
lism in its west-European isolation. One is tempted to answer
in the Marxian way that, as a limb of European economy, Marx
\
* Whatever Marxists may say about the impossibility of regarding the
colonial toilers as a single class, even under Marx's tests of community,
political consciousness and national organisation, the colonial toilers as a
whole are more justifiably a class than is the working class of capitalist
countries.
197
FRAGMENTS OF A WORLD MIND
could not see beyond the interests of the European working-class.
As a philanthropist, lie vaguely wanted the.whole world to prosper,
but the centre of his world with its deciding movements for eco-
nomic and spiritual welfare was placed in west-Europe. This
view is further confirmed by the attitude of Marx’s critics. They
have attacked Marx’s theorj’- of capitalist development from various
•angles such as marginal utilit)<- a="" alike="" also="" always="" an="" and="" argument="" aria-haspopup="true" as="" asiatic="" be="" been="" but="" call="" can="" capitalism="" capitalist="" capitalists="" class="goog-spellcheck-word" colonial="" communists="" consequences="" conspiracy="" costs="" creator="" development="" division="" down="" economic="" error="" even="" factories.="" forces.="" great="" has="" have="" id=":dh.5387" imperial="" in="" interests="" into="" it="" its="" labour="" lapses="" laws="" looking="" maintained="" marx="" need="" none="" not="" of="" one="" only="" or="" out="" over="" own="" party="" perhaps="" phases.="" pointed="" preference="" production="" proves="" put="" recent="" reflection="" role="menuitem" scales="" self-interest="" silence="" singular="" socialists="" sole="" span="" style="background: yellow;" tabindex="-1" tempted="" that="" the="" them="" thinking="" this="" thought="" through="" to="" upon="" value="" various="" west-europe="" working="" would="">appropriately
studied by analysing west-European economy after the first
decade of our centur3^ Apart from the fact that west-Europe
until recently decided the destiny of more than half of the human
race and was consequently the main determinant in affairs of
capitalism, it has, during this period, had the strength to involve
the whole world in two major Avars. In the study of west-
European economy, Ave Avill be concerned Avith economic facts, as
the thoughts and motives of men, except in so far as they are of
economic consequence, Avill be studied in another connection.
The main source of Avest-European economic movement m
this period has lain in the extremely heaA'y capitalisation of industry
and in the fact of multiplying capitalisms Avithin a territorially
blocked imperialism. The capitalisation of Avest-European in-
dustr}^ had, until the first decade of our century, proceeded on the
basis of CA^er-available large chunks of colonial masses and their
territories; it needed an expanding AA’’orld on Avhich to operate.
The source of such an expansion, is noAv completely blocked.
198
ECONOMICS AFTER MARX
There are no more new worlds whose colonial masses can act as
a dynamic to west-European capitalisation. On the contrary,
a kind of diminishing returns has begun to operate in the available
spheres because of the increasing poverty of colonial masses as
well as their obstruction and opposition. All this has produced
a chronic condition in west-European capitalisation; not only
has industry reached the summit of its capacity and can no longer
expand but it cannot make use of whatever capacity it has already
reached. The use of productive capacity fell in the five years of
the 1929 depression to nearly three-fourths and, in certain indus-
tries, it was as low as fifty per cent. Even in the five years
immediately preceding the 1939 war, Britain and France could not
make full use of their productive capacities. This downward trend
in the use of productive capacity was accompanied by downward
trends in world trade and employment.* West-European capi-
talism has thus been faced by three kinds of insecurities to its
existence; insecurity due to colonial poverty and obstruction,
insecurity of internal disorders and insecurity as a result of
competition within its own ranks and from extra-European lands.
Due perhaps to a doom that will not release^ it from its coils,
west-Europe has been wholly unable to meet, except in a hand-
yo-mouth fashion, the insecurity of colonial poverty and obstruc-
tion that most threatens its existence. Out of fear and a kind
of obsessed thinking, its conscious talk has been largely influenced
by the internal conflict bet^veen capital and labour. In actual
practice, however, and so far as vital consequences are concerned,
the insecurity that has moved west-European capitalism in its
entire being is the competition within its own ranks. Twice in
the course of a generation, it has sought to master this insecurity
by wanting to reduce its members in war. The downward trend
in productive capacity, world-trade and unemployment has been
followed by the upward trend in arms-industries and war.
* At the peak of the 1929-33 depressions, nearly 10 per cent of the
British and nearly 17 per cent of the German populations were the unemployed
and their dependents. -At the time, world trade also fell to about half its
pre-depression size.
199
FRAGMENTS OF A WORLD MIND
Back of the two wars in this period, in so far as economic
issues are involved, is the clash of productive capacities, the fact
that the productive capacity of one capitalist structure cannot be
fully used until that of another is laid low. This clash is overlaid by
a number of cultural issues and men might for all kinds of reasons
ranging from narrow interests to democratic welfare, and even
whole nations, get dragged into the war as a measure of national
freedom. All these reasons are perhaps important in the very
long run; some are even economically important and we will
presently consider them in their bearing on west-Europe. But
both as to economic origin and consequences, the wars of tliis
period are predominantly wars of productive capacities. The
biggest economic dissimilarity in the two wars lies in the fact
that the 1914 world-war was almost wholly of west-European
origin and making, while the 1939 war is only slightly more of a
west-European character than it is of Pacific set-up. Whatever
else this might denote, it unmistakably shows that the spheres
of economic vitality and arising disorders are shifting and that,
comparatively speaking, west-Europe is stepping back in histor}^
This steppinf' back is not occasioned by the destruction
caused in the two wars. The direct destruction caused to a
powerful country by war is seldom such that it cannot be made
good by replacements. Rarely do the killings, however large
they may be, outnumber the births, so that a war produces little
effect on the numerical strength of west-European populations
except with regard to the ratios between the age-groups. In
like manner, the west-European productive capacity, whatever
be the extent of destruction b)'^ land, sea and air, is continually
renewed and even expanded in the midst of war, so that the end
of a war finds a west-European power at a slightly higher
productive level in certain directions than at the beginning. It is
possible that the 1939 war, before it has ended, will have caused
vast destruction; even so, unless they fight it out to the last
factories, the productive capacity of west-European capitalisms
will not have been appreciably reduced. Not war-destruction. but
post-war incapacities reduce a people’s strength. The morale of
200
ECOXOMICS AFTER JfARX
the peoples, however, is quite another question. There is no
saying when a people might fade out of histoiy as a result of
repeated wars; the German example of a beaten people coming
back soon to war-like vitality makes such calculations extremely
hazardous. It might be said with caution that repeated and long
wars may at some stage turn a people from the zest of this life to
the bliss of the hereafter. Ne%-ertheless, it is safe to treat the factor
of people’s morale as an unknown variable.
West-Europe is stepping back in histor}' as a result not of
the destruction but of the shifts caused by war. The necessities
of war cause such a disturbance in the ratios of the productive
capacities, and their use, of the rvorld’s Great Powers that conti-
nents and hemispheres gain and lose at each other’s expense. The
end of the 1939 war will probably have achieved a greater
disturbance than the 1914 war did.* Impelled by the urge to
♦ Of the world’s seven Great Powers, at the beginning' of the 1914 war,
the ratio in favour of Europe was 5 : 2,
Of the five European powers, the three west-European lands, England,
Germany and France, were, in view of their developed economies and pro-
ductive capacities, genuinely Great Porvers, while, of the two east-Europcan
powers, Czarist Russia fell something short of a Great Power and the
Austrian Empire was only nominally so. The end of the 1914 war saw no
visible alteration in the world ratio, except that the nominally great role of
A.ustria was taken up by Italy while Russia started making strides towards
being a genuine Great Power. But back of this seeming stability in the
world ratio, a great change had taken place. The two c.\'tra-European
powers, U.S.A. and Japan, were so rapidly e.xpanding their productive
capacities and influence that one of them was preparing to be the world’s
greatest power while the other was amassing quite handsome chunks of
power. At the beginning of the 1939 war, the ratio of world powers was
nominally maintained, as before, at 5: 2 in favour of Europe, although real
strength could best be measured by the ratio 3 : 2. The progress of the
1939 war has already seen Italy knocked down so badly that she may not
again find it possible to strut about in peace-time as a Great Power on
pretence. France is, in view of her defeat and other reasons, unlikely to
regain her productive, or world-power position. Whatever may be the
outcome of this war and whatever shifts may yet take place, Europe will
have, with the most favourable ending, two Great Powers against two of the
rest of the world. If Soviet Russia is to be one of these powers, her inter-
vention in world affairs may continue in the political sphere, but is hardly
likely, at least for some time, to spread over to foreign trade and investments.
That leaves just one Great Power for the whole of Europe, whose productive
capacity is relevant to the future of capitalism. Whichever this power may
be, it will not only have defeated its other west-Europcan competitors in
war but will take care to see, at the end of tiie war, that not alone the militarj’
possibilities but more so the industrial possibilities of its defeated foes arc
201
FRAGMENTS OF A WORLD MIND
eliminate the insecurity of each other’s competition, west-
European capitalisms achieve through their wars a far greater
measure of insecurity. The increasing insecurities of colonial
poverty and obstruction, of competition from extra-European
capitalisms and, perhaps also, of internal disorders are causing
west-European capitalisms through their various wars to step
back in the affairs of man.
The west-European populations have lost their former rate
of increase. Some are constant, while others have a very slow
increase and all are showing unmistakable tendencies towards
great reduction b}' the end of the century. A reduction in
population, however, does not necessarily imply a reduction in its
capacity to dominate over colonial economies or to wage war.
destroyed, at least considerably curtailed. What this may mean to Europe’s
share in world trade is not difficult to foresee. Although competing with
each other, west-European capiatlisms, in their clustering, were able to
dominate world-trade. Europe took over 51 per cent of world trade. The
three west-European powers, England, Germany and France, took over 35
per cent of world trade. West-Europe, before the 1939 war, was undoubtedly
the economic centre and, therefore, also the military and political centre of
the world. West-Europe has irretrievably lost this position. This is so,
not only because one west-European power has already lost its productive
position and one more must follow suit, but also because the American
hemisphere is coming up. The productive capacity of the U.S.A. has gone
on expanding ev'en in the midst of war, as illustrated by its fantastic aircraft
production and Henry Kaiser’s a ship a day programme. This expanded
productive capacity is already manoeuvering for a corresponding position in
the world’s trade, air traffic, oil and other arrangements. Furthermore, U.S.
economy has now used up its internal djmamic and must have recourse to an
expanded world-trade. The pre-war ratio in world-trade between Europe
and the Americas that stood at 51 per cent to 23 per cent in favour of Europe
is likely in the post-war period to be reversed in America's favour, though
perhaps not immediately to the same extent. At the same time, the position
of Asia in world economy might perhaps improve slightly. K Japan loses
the war, the legacv of her productive capacity will to a considerable extent
be taken over by China and, so, in any case, there will be one great power in
Asia. A number of other economic and political movements are maturing,
whose course will to a large extent determine Asiatic development. The
pre-war share of Asia in world-trade was around 14 per cent and, whether
it greatly improves or not, depends very much on extra-economic and unknown
considerations. What these great continental drifts in world economy may
mean to the future of capitalism will in some measure be considered else-
where. -Before we enquire into their significance, let us be_ aware of their
existence. Suffice it here to say, therefore, that great continental drifts in
world economy are taking place.
202
ECONOMICS AFTER MARX
What a population may lose in numbers, it may gain in technique.
Actually, however, it is not so in view of the fact that the technique
of extra-European free economies is quite as advanced, if not
more, and, furthermore cultural and scientific stagnation does
under capitalist conditions seem to go with a constant or declining
population. The exact connection behveen cultural stagnation and
a declining population is difficult to determine, except in so far as
capitalism, because of a falling birth-rate, is denied a very vital
internal dynamic, which, in a variety of ways, also causes it to lose
its control over external dynamics.*
West-European inventiveness is also on the decline. With
the- rapidly increasing importance of electrical engineering and
the internal combustion engine, west-Europe is slipping back from
the unquestioned leadership in applied sciences which it held in
the age of steam and steel. The German effort at substitute and
synthetic industries is indeed a brave attempt at recovering by
technique what is not naturally available ; it is valuable for a closed
economy but can hardly determine the world’s economic career.
* West-Europe nearly trebled itself during the 19th century, exclusive
of the paupers who went to the U.S..^.; Britain quadrupled her population;
Germany trebled herself; France more than doubled herself. These vast
increases in population were helpful to west-European capitalisms to tide
over their industrial crises, as they offered enlarged markets and also supplied
man-power for heae-j- capitalisation. France’s population has remained cons-
tant for over two decades now. The failure of Germany’s deliberate effort
to reverse population trends indicates that statistical calculations putting
Britain’s population at around 25 millions in place of the present 45 millions
and Germany’s at 35 millions by the end of the 20th centurj- may not prove
entirely unfounded. There seems to be a great deal of truth in a British
novelist’s suggestion made about the imagined Forsyte family that the birth-
rate under capitalist conditions corresponds to the rate of interest. The
falling rate of interest is threatening to become negative and it seems hardly
possible to check the accomjianying decline in population. This reduction
in population, however, dees not by itself imply a reduction in west-Europe's
economic power against the colonial masses, .^s it is, in terms of the horse-
power used, the German population is greatly in excess of India’s and so
is Britain’s. Horse-power is a great determinant in existing forms of eco-
nomic and political power. Nevertheless, one has to beware of the concen-
tration of horse-power in the British or German style, for concentrated
horse-power is a reason among others of population decline and so forth.
If the age that is passing belonged to concentrated horse-power, the age that
is coming will belong to diffused, perhaps increased, horse-power.
203
FRAGMENTS OF A WORLD MIND
It is more in the nature of a heroic effort to delay as far as
possible west-Europe’s appointment with destiny.*
Colonial poverty and obstruction, more than any other factor,
are forcing a contracting rigidity into west-European economy.
From Peking to Kahira and beyond, over Calcutta and Bombay,
nationalism, at least with regard to consumption goods, is
becoming the dominant spring of action. Except some small and
semi-fashionable sections of city-dwellers, colonial masses show
greater interest in where their goods are made than in questions
of quality and price. Such an attitude is likely to grow and
ramify with the passage of time and its effect on west-European
economy can already be seen in the unlifting depression that ,has
set upon Lancashire and Lyons. At the same time, colonial
obstruction has been unable to produce any appreciable effect on
west-European investments and production goods industries.'
With the exception of Mexico where the British owned Eagle
Oil Company was confiscated, such attempts made elsewhere in
this period, as for instance in Iran, have come to naught. Nor
have any industries for the making of machines and machine-tools
been set up in the colonies, that may reduce the use of west-
European capacity in production goods. While colonial obstruc-
tion, therefore, has great effect on west-European industries of
consumers’ goods, it has little appreciable effect on producers’
goods industries.f
* Whether the accoustic torpedoes, radio-directed bombs and such like
of west-Europe’s war machine are indicative of continuing^ scientific vigour
or are the achievements of an old craft is difficult to tell. Perhaps Europe
may yet take the lead in the sciences of small-unit horse-power and low-
wattage electricity. As it is, U.S.A. was alreadj’' before the war the leading
country in industries of electrical engineering and the new science of electro-
nics seems to be making great headway there. As the Asiatic countries are
not burdened with the heavy capitalisation of an old technique, there seems
to be no reason why Asian scientists should not take the lead in the new
sciences of dispersed technics of electronics, plastics and so forth. .They
have, however, not yet shown adequate scientific vigour and are dominated
by the urge to ape European technics of the industrial sciences. All this
however should not in any way obscure the outstanding fact that west-
Europe is still the leader in the highest branch of science, that of mathematical
physics.
fA colonial population can determine the origin of consumers’ goods
even while it may be politically enslaved, but it cannot do that with regard
204
ECONOMICS AFTER MARX
Much more than their deliberate obstruction, the increasing
povertj' of colonial masses is causing rigidit}' and contraction in
west-European economy. Through successive repetitions of the
town-village relationship, over decades in some areas and over a
century and more in certain others, colonial masses are no longer
able to act as adequate life-givers to capitalist economies. They
may yet delay west-Europe’s final stepping back in world affairs by
their replacements of requirements for railways, public works and
consumers' goods industries, but these requirements are showing
a tendency to contract. Unless prevailing economic trends are
reversed and that does not seem very likely, the increasing
poverty of colonial masses will be the greatest single factor towards
the undoing of west-European economy.
Continental shifts in the use of productive capacity, tenden-
cies to declining population and to loss of inventive vigour and
colonial poverty and obstruction are relegating west-European
economy to a back-seat in the affairs of men.
Let us now see if the purposive activity of west-Europeans
is such as may stem their relegation to a back-seat. We will be
concerned here with that aspect of purposive activity which
produces tangible economic results; questions relating to motives,
secondary aims, moral worth, errors and of what ought to be
done will be discussed when we take up the general problem of
history.
The purposive activity of west-Europeans with regard to
their greatest insecurity has tended, with the increase in colonial
to producers’ goods, as the capitalisation under existing technics is lieavy
and the market is almost entirely confined to a foreign government and
native capitalists so that it is influenced more by considerations of risks and
prices and non-national interests than by national sentiment or interest.
The repair and loco shops of India, for instance, have, in spite of thirty
years’ talk, remained assembly and repair shops nor arc they likely to become
effective manufacturing centres for locomotives and automobiles. However,
the economic movement in producers’ goods industries begins when political
movements have matured into success and, therefore, this is hardly the place
to predict as to iiow soon or how late colonial obstruction may start affecting
the west-European industries in producers' goods. Incidentally, the Mexican
confiscation with some compensation to American and British oil companies,
although the result largely of Mexico's own national vigour, was partly
facilitated by the attitude of certain influential interests in U.S.A.
205
FRAGMENTS OF A WORLD MIND
poverty and obstruction, to be more political than economic. This’
tendency is likely to grow, not so much because colonial obstruction
will become increasingly active, but, more so, because the
problems of colonial poverty are too baffling to admit of an
economic solution by west-Europeans. Events no longer wait
upon capitalist activity in the colonies and it has very often to go
counter to them, so that it is almost always left behind. West-
European capitalisms are frightened of the development of cousin-
capitalisms in the colonies and they have even less vigour to work
out a new system of techm'cs that may bring, wealth to colonial
masses and impetus to their own economies. Retention, not
development, is become the colonial key action of west-Europeans.
With each repetition of the town-village relationship, the retainable
volume will lessen and west-European capitalisms will shrink
with the shrinking of colonial economies.*
* Recent west-European. activitj- in the colonies has been of little
economic consequence. The recent expenditure on canals, for instance, in
Sind, Rajputana and the Punjab, although big in its own way, has in no
way given a new dj-namic either to Indian or to British economy. If there
is any increased agricultural production, it is either just sufficient to cover
the canal rates, that is, the interest and profits on government-owned canal
capital, or it flows into tlie pockets of a verj- small section of big landowners
wdthout further productive use. At the same time, west-European actmtj*
in the colonies is assuming more and more a luxurj’ character, as, for instance,
the Bombay Backbay Reclamation, the new HowTah Bridge, the Tanganyika
Hunting Preserves, the Kenya Highlands and so forth. These may make
life more pleasant and beautiful for the west-Europeans and a section of the
native rich; they may even give a little retentive support to the west-
European engineering industries; but they are absolutely powerless to revive
capitalist or colonial economies. There is no likelihood of west-European
economic activity acquiring a different character. Recent trends indicate
that the west-European drift towards public works, transport and what is
now becoming known as agricultural mechanisation will continue. Whatever
their value as political or propagandist expedients, these measures of road-
making, canal-making, electrified agriculture and the like cannot revive
colonial economies nor can they assist capitalist economies beyond making
a small demand on the engineering industries. Until the internal relationships
of colonial agriculture, among landless labour, poor_ peasantrj* and_ big land-
owners are radically altered and, what is more important, until colonial
villages can undertake certain co-operative activities without much capital
expenditure and can also xeinvigorate themselves by some new tj'pe of small-
unit technics, there is no hope for colonial economies. All_ this
is beyond the reach of a foreign authority. There has indeed
been some straj' talk of a vigorous colonial policy, as, for instance, when a
Secretarv of the British Federation of Industries, speaking at a meeting of
the Royal Institute of International Affairs, proposed the development ot
206
ECONOMICS AFTER IIARX
West-European political activity- in the colonies is simple.
If colonial poverty is an insoluble problem, colonial obstruction
is not quite that. By virtue of their political power, west-
Europeans have to date been able to prevent a sudden cessation of
the colonial dynamic through the revolutionar)' action of colonial
masses. They have also tried to appease colonial obstruction to
the extent that is possible without danger to their own economies.
^^^hen therefore, west European political activitv in the colonies
is not based on repression, it is infonned by the tactics of investi-
gating commissions, enquiry committees, reports and piece-meal
reforms. This is so not only when conser\'atives are in office,
but also when popular front governments, such as those in France
and Spain to which Socialists and Marxian communists were
party, held office. Nor is this condition likely to change. The
liberal conscience of west-Europe, whatever its moral worth,
is too uninformed economically to be able to direct the future of
capitalism. Its solution to let the colonies develop themselves in
freedom and to depend on their goodwill for such dynamic as they
may choose to give has never been worked out in its economic
details and, even if it were, there is no guarantee that it would
Africa and other colonies at a negative rate of interest. In the first place,
such talk is more an adventure in thought than a working policy, for west-
European capitalisms will far sooner battle against the inevitable than accept
such a vigorous policy- full of grave and unknown risks ; in the second place,
it shows that even the most fore-sighted of wcst-Europcan economists can
only think of colonial development on the basis of old technics and, therefore,
on the basis of diminishing capital. West-European capitalism, therefore,
is likely to continue fighting a rearguard action on the colonial front ; even
more in the economic than in the political sphere, must it forego all positive
ideas and stick to the negative policy of non-liquidation. It can at best trj'
to prevent the deterioration of the colonial dynamic to the extent that is
possible by the employment of political methods. This will be so, whether
conservatives are in office or communists or any other variety between these
trvo extremes. Marxism has no solution for the heasT capitalisation of
west-European industrj'. Its ready-made answers that, with the socialisation
of industry, everything will be all right, must appear strikingly irresponsible
not only to the owners and managers of wcst-Europcan industiy- but also
to imperial labour with its sub-conscious insight into the need for colonial
annexes. That is why Marxism has so far proved unacceptable to west-
Europeans and their working class and, should it under some stress capture
power, it must, with its present understanding of the class-struggle and
technics, stick to the economic policy- of colonial non-liquidation or, else, if
it chose to fulfil its loosely held ideals, send wcst-Europcan economy hurtling
along the path of relegation, of low production and unemployment.
207
FRAGMENTS OF A WORLD MIND
prove acceptable to west-European governments* Unless,
therefore, some severe stress occurs as a result either of successful
colonial obstruction or of great continental shifts in the ratios of
. productive capacit}--, west-European political activity in the
colonies will continue to be based on the policy of retention. In
the midst of slirinking economies, this political policj'^ to retain
whatever is possible can only mean the attempt to stabilise colonial
masses into the lowest caste of capitalism much in the same manner
in which Hindus of a disreputable period stabilised one of their
own limbs into the caste of untouchables.
With regard to the insecurity presented by the clash of
productive capacities, west-European purposive activity has been
able to evolve nothing be}'ond international understandings on
technical processes and certain quotas of production and trade.
Such understandings open or secret are arrived at among the
capitalists of deciding nations and they have operated in spheres
like oil, chemicals and sugar. While they last, they are helpful
in removing various sources of friction among different
capitalisms but they are wholly unable to prevent war. As,
however, west-Europeans have no economic remedy other than
this against war, these international understandings, when they
are set up once again, are likely to cover extensive spheres such
as foreign exchange and currenc3L They will undoubtedly help
in delaying another outbreak of open hostilities among nations,
not only because of the wide tie-up they will introduce among
important national economies but more so because of the lessened
competition due to the post-war destruction of a few substantial
economies. Nevertheless, these understandings can hardly prove
enduring, as they will be strained, on the one hand, by the
diminishing yield of colonial dynamic and, on the other, by the
pressure of continental shifts on their stable systems of quotas of
* Incidental!}', this liberal conscience of freedom and justice is not to be
confused with west-European communism. On account of its mistaken
understanding of the world struggle, west-European communism, when it
is not irritating its own nationals, is busy exasperating the colonial masses
whose struggles it chooses to look upon as the e.xpression of bourgeois and
petit-bourgeois interests. It is thus ineffective and, to the extent that, it
befogs men’s minds, somewhat harmful.
208
ECONOMICS AFTER MARX
production and foreign trade. They can delay war, but they
cannot prevent it. It is even possible that the var that comes
after' the operation of these very loose international agreements
on production, currency and trade may be genuinely deadly.
Nevertheless, world capitalisms must pursue this policj’ of inter-
national understandings, for they have no other economic
preventive against war.
* * * *
The U.S. and Hindustan are graduating themselves into the
two polarities of the rest of our world. If the U.S. has become
the leader of the capitalist system, what happens there might yet
deflect the sequel being worked out in west-Europe ; so is
Hindustan become the chief arena for the shaping of an alternative
economy.*
The U.S. productive capacity is higher than that of the three
west-European lands, Germany, France and Britain put together.
Its productive capacity in mining and manufacturing, and that is
what matters in the international relationships of world economy,
is higher than that of the whole of Europe. But, with this
economic expansion, the U.S. has fully exhausted its internal
dynamic and used up such a dynamic as it could get- from the
other countries of the American hemisphere. There is now little
question of further expansion ; the U.S. is faced with the problem
of preventing a set-back into lower levels of production.f But
* The study of west-European economics has disclosed the main direc-
tions in which the capitalist system is developing, among which is the shift
in favour of the North American continent. 'Wc have now to find out
if this shift alters or modifies any of the main directions. There is not
much need for our purposes to study in detail the remaining major capi-
talism, that of Japan, as it is developing more or less along west-Europcan
lines, only that the caste-stratification is easier and tlie relegation slower.
With respect to the two-thirds of the human race, the colonial adjunct of the
capitalist system, our study of Hindustan will apply more or less to Oiina,
.to practically the whole of Asia, to Africa, to the broad masses in the
South and Central American Republics. Hindustan has become so to say
a mirror to these other economics. The chief among the colonial adjuncts
has come to such a point of saturation that it reveals the many facets of
colonial economy better than any other.
t The enormous production of the U.S. A., as reflected in its ycnrly
national income, which, with round Rs. 1,400 per head in a population of 13
crores, works out at one and three-fourths of the total in the three west-
European lands, Britain, France and Germany, with an average of Rs. 750
14
209
FRAGMENTS OF A WORU) MIND
per head in a population of 16 crores. It may be suggested that a higher
cost of living and the greater range of ser\'ices in the U.SA. vitiates these
figures and tlie productive capacity of the country should be assessed on
firmer grounds. _ Of tlie world’s entire primary produce in 1937, Europe
shared- 21 billion dollars, Europe including the U.S-S.R. shared 28
billion dollars, while North America comprising U.S. and Canada
shared 15 billion dollars. These figures, however, do not give an adequate
idea, as they are made up largely of food and other agricultural products.
Confining oupelves to non-agricultural products, we find that Europe in-
cluding Russia produced 39 per cent, Europe excluding Russia produced
30 per cent, while North America shared 40 per cent of the world’s total.
These non-agricultural products used in industry and manufacture give a
true idea of the U.S. productive capacity, which is thus shown to outstrip
that of the whole of Europe including Russia. That the Canadian productive
capacity is here merged in that of the United States does not introduce a
new factor, as it is comparatively small and is more or less an annexe of
the U.S. Further evidence of the preponderance of U.S. productive capacity
in world economy can be had from certain figures of production in 1937 ; it
may be remembered that this year was particularlj- favourable to Europe in
view of its hectic rearmament.
Europe
minus Russia
Europe plus Russia
North America
Raw Material
.. 24%
34%
35%
Fuels & Power
.. 30%
38%
47%
Metals
.. 24%
36%
34%
It is well known that the U.S. produced over 65 per cent of the world’s
petroleum in 1929 and has not allowed the ratio to fall very much lower;
at one time, it produced nearly 80 per cent of the world’s automobiles; its
production of steel and cotton was almost half of the world’s. The 1939
war must have further expanded U.S. productive capacitj" U.S. leadership
in world economy must now be without parallel.
If U.S. productive capacitj- has on the one hand reached such amazing
heights, it has, on the other, arrived at its peaks from where the downward
passage is already showing. On the basis of 1929 being 100, the North
American mining and manufacturing position had deteriorated to 93 in 1937
and 73 in 1938, automobiles had sunk to 89 and 4^, while the index of
producers’ investment goods fell to 87 in 1939 and 54 in 1938. The U.S.
has exhausted its internal dynamic. The expansion in rail-roads and allied
industries, in internal roads and the automobile industry appeap to have
reached its limits; the 1929 production of 50 lakhs automobiles in a world
total of 63 lakhs is an all-time record. Even the production of electricity
can only be extended more with a view to tide over a depression than to
satisfy real needs of expansion. There is also not much scope for expansion
in the internal consumption of food or cloth. It may be remembered ftat
the U.S. has used up whatever d>-namic it could get from the South American
Republics without going too far in the vi-ay of west-European empire-colony
relationshios.
What stares U.S. in the face is that, despite almost ten years between
1929 and 1938 of increased population and scientific improvements, its
production-index of capital goo^ fell to 87 while that of Europe rose to 111
It would appear that the leader of capitalist economies is fated even more
thdh the other members to suffer speedy contraction and relegation. When
the 1939 war has ended, some of the west-European capitalisms at any rate
will have a lot of internal reconstruction to put through while the U.S. will
210
ECONOMICS AFTER MARX
the world is limited and imperialism is territorially blocked.
Increasing jwverty in the colonies is causing a contraction in such
capitalist economies as have so far been using them up. The
leader of all capitalist economies will thus have to discover fairly
soon whether it can enlarge an external dynamic in the process
of using it to its own advantage. Is it at all possible to shunt
world-trade from its empire-colony rails to a new road which leads
to expansion in the production equipment and consumption of all
trading countries? U.S. economy will have to tackle this
question, not for the good of the world, not for the good of the
colonies, but for its own survival and for full use of its own
productive capacity. If there is no answer to this question, U.S.
capitalism must suffer the same tendencies to relegation and to
transformation of class into caste, which we detected in west-
European capitalisms. We have therefore to find if there is any
additional strength in U.S. capitalism, which marks it off from'
its west-European cousins. Before we do so, let us broadly go
over the entire scope of dangers to which we have found world
economy to be subject.
The severest danger to world economy consists in the
productive equipment of two-thirds of the human race. Denied
the advantages of science and improving technics, this equipment
has been knuckling under the weight of foreign capitalisms and
labour done with its help is getting increasingly barren of yield.
5000 crores of labour-hours under this equipment are of equal
have no such additional incentives in repairing war-destruction. There may
be few years of animated demand, in consumption and in the produce of
limited new industries. The United States will thus be wholly unable to ‘
make use of its expanded productive capacity unless it chooses to utilise for
post-war world-trade the shifts caused in mid-war. Herein lies a reason
for the decay of U.S. isolationism stronger than any articles of faith.
The U.S. productive capacity demands involvement in world-trade. It
demands a world in which trade shall freclj' grow. Aside from the question
of what a largely self-sufficient economy can excliange for its produce,
the United States will have a still greater menace in the poverty and
obstruction of two-thirds of the human race. If colonial poverty is
primarily causing the relegation of west-European capitalism, it also re-
mains to cause a lower use of the U.S. productive capacity. The most
outstanding question, for capitalist survival, therefore, is whether the
leader of capitalist economies will be able to face any better than west-
European capitalisms the issue of cojonial poverty.
211
FRAGMENTS OF A WORLD MIND
money-yield to 250 crore labour-hours in free capitalist economies.
This great unbalance in the productive equipment of the human
race goes with the equally great unbalance in its political and
armed power. There are three major aspects of this unbalance.
One aspect is whether the world’s productive equipment at all its
geographical points could be brought to the efficiency of yield that
has been attained at any favoured point. If that were not
possible, can tlie productive equipment of the retarded nations
be in the alternative so remodelled as to give an average per-
worker yield ,of the world’s production? These t^vo aspects,
however, relate essentially to the creative activity of the retarded
peoples themselves and the existing capitalisms can have nothing
to do with them except in so far as to support the activit}' when
necessar}A But there is a third aspect with which the continuance
of the existing capitalisms is bound up. This is the aspect of
the decreasing yield of colonial labour-hours in a world where no
new ones can be annexed and those that have been are jockeying
to get into their own. This decreasing yield of the retarded
peoples is depressing the highl}' mechanised industries of the free
economies. Time there was when this mechanisation proceeded
triumphantly with each new annexation, but the reverse process,
going on all the time, is now become irresistible ; larger and larger
masses of men are getting thrown on the rubble of the outermost
rings of the colonial circle. These men just do not exist either as
market for foreign manufactures or as field of investment for
foreign capital. To raise their consumption has always been a
o moral and a human need, it has now become an economic need of
the free capitalist economies. This can only be done by improving
the productive equipment of the retarded peoples and by so
reshaping their internal distribution that larger masses may get a
share at least of the increased production. We have found the
west-European capitalisms wholly unable to face this issue of the
productive and distributive equipment of the retarded peoples
and the Japanese capitalism has also no solution except the short
expedient of cheap-selling goods. The closed Russian economy
is not yet concerned in an economic way with this world issue.
It will now be' our task to find out how far, if at all, the leading
212.
ECONOJriCS AFTER MARX
capitalism of the U.S.A. may give a new twist to this paramount
issue of world economy and, in what manner, the retarded peoples
themselves, as mirrored in Hindustan, may attempt to refashion
their productive and distributive equipment.
Second only to this danger of retarded equipment in two-
thirds of the world is the danger of prevailing technics. Heary
and large-unit technics have been the mode of a world in v.'hich
application of science to industry' is the exclusive privilege of a
few powerful nations. These same technics cannot be spread
throughout the world without being in some measure an act of
simple displacement. If Hindustan and China are to build ship-
y'ards and make turbines and textile machinery of their own,
they' will no doubt add to their own wealth and, in the process,
may' add somewhat to the wealth of the world but will also take
away considerably from the productivity' of the Japanese and
British capitalisms that have so far supplied these needs for them.
This, however, is a question which we may set down as insoluble
in any foreseeable human future ; no free nation would ever reduce
its own wealth in order that another’s may not be reduced nor
would all the nations of the world agree to share equally in the
fruits of human toil. Simple displacement in the application of
prevailing technics to economy and, with it, displacements in the
wealth of nations are therefore bound to occur.
The more serious aspect of the danger of prevailing technics
lies elsewhere. It consists in the unequal application of science
and mass-production to man’s various demands. If it were
possible to produce unlimited quantities of all ty'pes of goods, this
danger would not exist. But that is impossible in any economy of
any age or type. Even for such first demands as bread and milk,
man has not yet found the means for their free municipal supply'.
Perhaps in a very intelligently managed economy under social
ownership, he may make of bread and milk. free supplies as of
water, although in fixed equal quotas, but that too will take a very'
long time to come. The economy as a whole, whatever the
ownership and management, must remain an economy' of scarcity
and price, unless a benevolent God gives us again a Kamdhenu or
213
FRAGIIESTS OF A V,'02LD
places U5 back in Adam's paradise. We cannot escape the price
mechanism. In capitalist economies, this price mechanism coupled
v.'ith the needs of ymr has made for a block-use of sdence, not an
all-round use. Sdence and mass-production explore in any period
a special bit of the territor}’ of men’s demands, this particular
demand becomes most profitable to supply and productiTe cz-pzdty
in this sphere is pushed into great expansion. This is the basis
of heavy mechanism, large-imit technics and mass-production. The
Sodet econom}' of Russia has indeed eliminated the profit motive,
but has taken over the technical basis of capitah'sm, its block-use
of sdence, its lop-sided large-unit technics. The problem of
teclmics is therefore independent of the form of ownership in an
econom}* and must be tackled separateh*. Otherwise, it majv' make
for specific industries, expanding and depressed by turn, for
obstruction in changing oi'er to better processes and materials,
for foreign exploitation, for chimerical expansion, for concentrated
destruction in time of v/ar and, abo%-e all, for hopeless mal-
distribution of sodal understanding and intel%ence and for an
unequal distribution of wealth. An economy with large-imit
technics and block-use of sdence cannot achieve balance.
This problem of technics is not to be confused with the demand
to return to a simple life with few wants. Nor is it to be taken
as an advocac}' for simple spatial decentralisation, now becoming
quite a fashionable idea, in which all that is done is to break up
prevailing technics into its several processes and to specialise these
in different factories over different areas. It is as little to be
taken for a denial of the machine or, of mechanical and electncai
power; it is not an advocacy of handicrafts. AH these aspects are
diversioneiy* offshoots of the current problems of technics; the
basic problem is not to cut down the use of mechamcal or electncai
power but to make it available for production in the same small
units in the manner it is today a^’ailable for consumption in pros-
perous economies as light, ventilation or heating. This may
increase the total wattage and horse-power in use, most certainly
it would do so among the retarded peoples, and this power would
be a kind of maid-of-all-work and, there would be corresponding
214
ECONOMICS AFTER MARX
small-unit machines to process not one bit of an article but to
produce the whole article. This •will require an almost new
beginning in science, a kind of flexible small-unit technics. It
cannot be achieved at once, nor does it toda}' seem at all possible
in spheres such as those of turbine and automobile manufacture.
But an economy must steadily aim to realise flexible technics
wherever possible. Only so can an economy hope to achieve real
and undepressing expansion and an equal distribution of wealth
and social understanding. Only so can an economy acquire
balance, in which man’s various demands are orchestrated in a
harmony of all-round application of science. So ma5' perhaps
culture and economy become joint partners in an enterprise of
all-round and unhurried development in place of the order where
culture is subject to an economy of piece-meal but fevered
expansion. We have found privileged and imperialist west-
Europe burdened too much with its own past of heavy mechanisa-
tion to take up fle.xible technics and Soviet Russia does not seem
inclined to experiment with any new patterns of science. It will
be our task now to find out if the U.S. has any contribution to
make in this direction, more particularly, if the retarded peoples
can summon up enough understanding and courage to show a
new way of technics.
The third danger to world economy consists in private
ownership and the corresponding forms of distribution. Critics
of capitalism have fi.xed this danger in such well-known phrases
as ‘the clash between forces of production and relations of
production' or ‘the lag between production and purchasing-power'
or consumption. Even those who reject the theoretical scaffolding
of these phrases, namely, the labour theory of value and the
theory of surplus value, continue to talk of the main malady of
capitalism, as the clash between expansive production and con-
tractive consumption. Actually, however, there is no reason why
there should be contracting consumption even in a society where
a considerable part of the annual wealth is usurped by the small
class of capitalists and landowners. Such a differentiation of
consumption will take place that luxury goods play an unduly large
215
fragments of a world mind
part m the economy. The purchasing power of wage-earners
and little men is restricted, not so of the owners, so that there will
be a greater consumption of luxury goods and no necessary lag
between production and consumption. It is, of course, possible
that not all the earnings of capita! are consumed and a large part
of these are saved. These savings may be larger than what is
possible to invest in further production. In such a case, there
will be a falling-off in consumption. But, then, this will be under-
investment or the inability of production to expand. Actually,
this is how the apologists of capitalism, with the reason or
unreason of its traditional critics, are styling the trade cycles
and slumps. They maintain that, during periods when an old
demand exhausts itself, a scientific impulse runs out and no major
inventions take place, production cannot absorb savings. In other
words, the forces of production are weakened. What thus started
as the theory of low purchasing-power and contracting consump-
tion in the hands of the traditional critics of capitalism has now
made its full circle as the theory of under-investment and weakened
forces of production in the hands of its upholders. This is the
fate of all theories which contain a partial truth. For a time, they
appear so true and brilliant, and then they are shown to be too
wide a generalization.
We know the origin of these errors and how wrong it is to
think of production, consumption and savings in abstract or as
entities of an isolated capitalist economy. We have found them
to be highly complex categories of a duality consisting of an inner
capitalist circle and an outer colonial circle. The basis of capitalist
development has lain in the clash between expanding equipment
of the free economies and contracting equipment of the annexed
economies, between imperial production and colonial production,*
*We must continue to avoid all questions relating to the general
theory of value. If, in earlier parts of this study, the term, value, has
been used, it was more with a view to explain Marx’s econonne though .
And where the conception of surplus value has been attempted to _oe se
right, it has stood for nothing else but the source and extent of ^ploitatwr
that takes place in a world of political and armed inequality, une ot tn<
most prolific subjects of economic enquiry is value and its measurement
But the results attained are hardly in keeping with the enormous laboui
216
ECONOMICS AFTER MARX
As such, the dangerous consequences of capitalist ownership can-
not be fixed in such abstract phrases as the clash between forces
of production and forms of distribution. These dangers have to
be viewed separately. The most important among these is the
•level of consumption among two-thirds of the human race. It is
a consequence of the productive and distributive equipment of
the retarded peoples, which is itself a consequence of capitalist
rule over the world. We may merely note it here as, one, the
fact of colonial starvation and, two, the fact of blocked and falling
consumption of quality goods of foreign manufacture.
spent on the subject. All the current theories of value arc variations cither
of the labour theory or of the supply and demand theory. No formula-
tion helps us to understand life’s economic substance, for the formulation
is rigid and eternal, while the substance is fluid and, historical. We have
seen how Marx’s socially necessary labour-hour as the measurement of
value is all upside down in view of the imperial-colonial inequality in the
application of science. The only thing really worthwhile in this thcor>-
is its ideal, its norm, that the labour-hour should be enabled to produce
approximately equally, whether in Timbuctoo or in Sydney, and that it
should be given appro.ximately equal consumption. In like manner, the
supply and demand theory, also in its form of marginal units and preference-
scales, deliberately ignores the forced conditions within which the narrow
act 'of buying and selling takes place. This theory is perhaps pood enough
as a principle of accounting and industrial management, but, as a mirror
to value in changing economies based on changing forms of ownership
and rule, it is hopelessly anaemic.. All this discussion has perhaps pro-
ceeded from a question that docs not exist ; what 1s value is like asking
what is God. This may be a good enough question for metaphysics, but,
for economics, the proper question relates to the price-mechanism through
which a set of historical conditions translates itself into money-expressions.
We must therefore avoid this discussion on value and retrieve from its
debris the only article of value, that labour-hour, whatever its land, should
be enabled to produce approximately equally .and, whatever its form, should
be assisted to consume approximately equally. For the rest, economics
must study man as a producer under certain conditions and as a consumer
under certain conditions. Our enquirj' has related to the conditions of
capitalist development. We have studied capitalism as a process in time.
This has yielded certain results both as to the past and. as to the current
tendencies that run into the future, but more so is it important as a method
of enquiry. It may be possible, and perhaps worthwhile, to erect
a logic of theoretical economics based on this method and the results,
but that would be a vast and independent undertaking. Such a logic
w'ould presumably deal in detail with five entities, man in in’s
economic dealings, productive equipment in its relative yield, world-
relationships, political rule and economic ownership. Essentially these would
be the two entities of labour and the productive equipment and they would
act and react upon each other in the context of the three other entities.
217
FRAGMENTS OF A WORLD MIND
When we confine our study to the distributive mechanism
within the inner capitalist circle, recentmost development discloses
an increasing emphasis on luxury consumption in contrast to the
consumption of necessities. In the measure that capitalist
economies are unable to expand or even to make full use of their
available productive capacity, there take place unemployment,
seasonal employment and price fluctuations that affect the wage-
earners adversely. All this leads to under-consumption, both in
quantity and quality, of the necessities of food, clothing and
housing ; around-the-poverty-line consumption in the case of nearly
twenty percent of west-European population. It is hardly likely
that, so long as the profit-structure and the world-relationships
of empire-colony production remain intact, any schemes of
minimum wage and social security may offer an enduring solution
of this vexed question. There is also a certain amount of
voluntary foregoing of necessities in favour of fashion or enter-
tainment, as in the case of the west-European girl who would deny
herself a meal a day for a whole week so that she could get her
dress laundered for the next ball. One can depend on capitalist
civilization to keep up such expenditure. Essentially, however,
the enormous earnings of capital in the highly-capitalised economies
must partly spend themselves in luxury, as this is encouraged by
the lack of new fields of investment and by tax-policies and also,
because, in its absence, there would be a further fall in production
and slumps would grow acuter. The structure of over-capitalised
profits in the context of contracting economies turns luxury-
expenditure almost into a kind of national virtue. There are, of
course, various grades of luxury-expenditure as of the low
expenditure on necessities, but we may broadly describe this
dangerous feature of capitalist distribution as the under-consump-
tion of necessities and the growth of luxury-consumption.
But the distributive dangers of late-capitalism go deeper than
the increased expenditure on luxury and the blocked expenditure
on necessities. The enormous earnings of late-capitalism cannot
be wholly reinvested nor spent, and the larger part of these must
perforce remain idle. It must be remembered that these earnings
218
ECONOMICS AFTER 5IARX
are the genii of a system by which the three west-European, U.S.
and Japanese capitalisms meet almost wholly the world’s demand
in machine-tools, machines, transport and power engines and in
a considerable range of manufactures. There is thus a concentric
force that pushes the world’s capitalist profits into these centres.
But there is now no pushing back of these as profit-yielding new
investments or manufactures. We are already familiar with the
main argument of this increasing exhaustion of the external
dynamic and we will yet have to straighten out some tangles ; we
will here confine ourselves to that aspect of the external dynamic
which does not permit the reinvestment of its profits. Let us take
one by one the fields of investment in the retarded economies. It
would be a highly dangerous undertaking to equip retarded
economies with the industry of machine-tools, for, whatever the
initial investment, Western capitalisms may thereby choke the way
to their own sales of machines and engines. Except under
irresistible competitive and political pressure from a stronger
cousin, no capitalism can ever want to sell machine-tools where
it can sell their products, locomotives, textile-machines, turbines,
printing-presses, autos, dynamos and so forth. It would be the
turning of an annual demand into a twenty-yearly demand, if even
that.* Likewise, imperial capital except of the U.S. has got so
mixed up with the sale of manufactures to retarded economies
that it would seriously depress itself if it chose to sell machines
instead or invest in them ; this danger has got fixed into the well-
known phrase of the clash between Birmingham and Lancashire.
Only such machines have been installed in the retarded countries
as followed a long and bitter fight or as were not competitive with
manufactures. Imperial capital would have preferred to sell
electricity rather than turbines, if it could somehow, on cables or
elseway, ship the current with profit ; it prefers to sell continually
the electrical accessories of bulbs, radios, refrigerators and the like
to a limited clientele rather than risk supplying them with the
* In the year 1942, of around 1000 per cent machine-tools e.xpansion,
the U.S. produced less than 2000 million dollars worth of machine-tiols
against a total machine production thirty to forty times as much. The
U.S. machine-tools industry is likely to slump severely in the post-war
period, for machine tools last 10 to 40 years.
219
FIGMENTS OF A WORLD MIND
machines to manufacture these. Along the entire gamut of
machine-tools, machines, engines and manufactures, there is an
internal competition and imperial capital therefore exerts its
utmost to retain its areas of consumer’s goods rather than seek
investment in new fields of colonial production.
This rearguard and fear-stricken policy of retention is further
encouraged by the fact that major capitalisms including the U.S.
have little capacity to absorb an increased produce from retarded
economies. Their demand for food and raw materials is not
capable of great expansion and such developments as increased
food production in England and the U.S. quest in Arabia in
pursuance of its oil-conservation policy are likely to cancel each
other in their effects on world trade. Unless, therefore, the breath
of freedom fructifies the science and technics of retarded economies
so as to produce raw materials or quality goods, the problem of
increasing their food and their primary produce remains an inter-
nal question, without effect on world trade. To increase the food
and cloth supply of two-thirds of mankind may be man’s greatest
economic task, but world-capitalism must remain indifferent to it
as long as it offers no commodities for international exchange nor
return on investments. The colonial masses have interested
imperial capital as low-wage producers of limited raw materials,
as rate-payers on its transport and public utility installations, as
consumers of its manufactures and all this range of interest
provides no scope for new investments. World capitalism has
come to a dead end where new investments in the retarded
economies threaten to choke off the source ,of its profits. The
greatest distributive danger of late-capitalism is thus the enormous
accumulation of unproductive savings and the continued depression
of the colonial equipment.
Aside from the distributive dangers, late-capitalism continues
the tradition of waste and deceit in production and, what is worse,
deepens the element of chaos. As a principle we are already
familiar with the industrial crisis and trade cycles that are as old
as capitalism itself and we have also traced how the territorial
blocking. of the external dynamic has thrown it into a condition
220
ECONOMICS AFTER MARX
of general crisis. But, even, in this condition, there is no gradual
decline, but general disorderliness and ups and downs Unable
to find new profits in the industries of life’s staple substance, the
methods of capitalist production lead themselves profitably to new
industries of tenuous living on a mass scale. It is not for nothing
that the industries that could still greatly expand in the decade
before the 1939 war were those of films, radio, alcohol and low-
price fashions. Air-travel and televised entertainment seem now
to be on the list and, though’ various pep foods and vitamins might
yet effect some improvement, the staple demand that capitalism
seems yet able to tackle and mass-produce is that of pre-fabricated
houses. This will probably have been capitalism’s last useful
contribution, not to the world, but to its favoured peoples.
Capitalism goes where it finds profits and this productive impulse
must further exaggerate the importance of luxury-consumption,
not alone of the high-income groups but also of the low-price
mass-scale variety. In addition to this specific chaos of tenous
production, the general chaos of the regulation of an entire
economy by the blind motive of profit remains. This motive
expands the supply of certain demands beyond supportable
dimensions, there is a scramble to contract just as there was a
scramble to expand, and the sensitiveness of markets assisted by
highly speculative expectations produces serious ups and downs.
A serious fall in the use of late-capitalism’s productive capa-
city makes of war an almost irresistible temptation. When
demand in producers’ goods and transport falls very much below
the supply arrangements, there is a temptation to shunt to war;
if steel, autos, electrical equipment and such like are not suffi-
ciently purchasable for civilian use, their rate of consumption as
tanks, jeeps, shots and shells can be feverishly fast. The
insecurity emanating from the unemployed millions disappears for
a time, the victor hopes for enlarged exports to retarded peoples
at the expense of the defeated capitalisms and rationed consump-
tion during the war serves to animate the post-war civilian demand
just as it helps an imperial population to key up its war-effort to
a total pitch. If the index of producers’ investment goods in a
221
FRAGMENTS OF A WORLD MIND
major capitalism is falling too far low, an experience to which
late-capitalism must be increasing!)' subject, and if it is elsewhere
shooting up so high that armaments alone could have done this,
the cunning of rulers has discovered no means other than -war
and its preparations as the way out. The greatest danger of late-
capitalist production to world economy is its general and special
chaos and its escape-mechanism in war.
It is surprising how late-capitalism with its surfeit of sawngs
and the comparative lack of nev.' investment-fields can still preserve
a handsomely positive rate of profits. Should not capital flow into
the available fields of investment and increase earnings or bring
down prices and expand production, although, in the process, the
rate of profit may fall so low that the rate or interest reaches the
zero or the near zero-level? Against this natural development
are operating the forces of monopol)', such monopoly as is the
result of concentrated production as well as that which depends
on the political rule of one country' over another. The monopoly
in production operates because of the huge amount of capital
necessary' to start rival and risk}' enterprises in the industries of
producers’ goods, because of government assistance and of the
national and international understandings of capitalists in the
same industry'. The monopoly in the foreign trade and invest-
ments of subject peoples can operate either nakedly or through
the. currency', tariff, purchase and other policies through which an
imperial government can easily shut out inconvenient competitors.
These monopolies, arising out of imperial rule as also out of heavy
mechanisation, shut out rival capital, keep production low and
prices high. Their aim is to maximise profits, while, if they had
not e.xisted, there would be expanding production, particularly
among retarded peoples, at levels of nominal rate of interest. In
fact, interest has about ceased its productive fimction in the major
capitalisms. It still continues its distributive function of making
the rich richer or of maintaining a rentier class. But its produc-
tive function is restricted to an expanding economy, when
enterprises of old and new wants are continually added and interest
serves as a regulator. In an over-capitahsed economy that can-
222
ECONOMICS AFTER MARX
not further expand, interest is a deadweight and an obstruction
to production. That the monopolies keep it up artificially prevents
in particular the expansion of colonial equipment and does not
allow late-capitalism to face its distributive dangers. But such an
artificial maintaining of interest is bound to lead to a clash between
capital that is being used and capital that is idle, capital that is
tending towards extinction and capital that is artificially propped
up to continue. This monopolistic maintaining of interest and
profits as a productive factor in late-capitalist economies is thus
a serious interference with normal development and the source
and aggravation of the many dangers to which world economy
is subjected.
The dangers of private ownership in late-capitalism may now
be enumerated as, in the sphere of colonial economies,* the fact
of starvation, the fact of falling consumption of foreign quality
goods, the fact of enforced depression of the productive equipment
and, in the sphere of developed economies, the fact of under-
consumption of necessities, the fact of growth of luxury-
consumption, the fact of unproductive savings, the fact of chaotic
and war-making production, the fact of monopolist continuance
* The concepts, “retarded economies,” "colonial economies,” “outer
circles,” on the one hand and “major capitalisms,” “imperial economies,”
“capitalist economies,” on the other have been here used more or less
synonymously. It might appear somewhat extravagant to lump together
Hindustan, China, Iran, Sinhal, Misrc or Congo under one category, in
view of their varying political status. But, on the deciding issue of
capitalist development, their status is similar, that of a retarded, colonial
equipment which acts as an external dynamic to the major capitalisms.
Without a doubt, there are two main economic camps in the world today
and the basis of the division lies in the use of science and technics and in
the yield and fruits of the labour-hour. Such an economy as that of South
Africa is obviously colonial, with this difference that there is a very'
numerous middle class in the’ shape of the South African whites. The
Australian economy, however, has slipped out of the colonial field, not
because it is rapidly industrialising itself, but because the free application
of science to its agriculture and sheep-rearing has enabled it to enter the
world market with a raised status of the labour-hour. Nevertheless, it
has certain mixed features, not the least important of which is its imperial-
istic exclusion of new settlers from a land, almost twice as big as Hindustan
with less than l/40th of its population, and a corresponding dependence
on a stronger capitalism, that used to be .Britain but is now changing
into the U.S.
223
FRAGMENTS OF A WORLD MIND
of interest in an unexpansive economy. Some of these facts
overlap each other and, in particular, the productive equipment
of the retarded peoples. West-Europe has been found to be
wholly unable to overcome any of these dangers with the result
that its classes are being transformed into castes and its economies
are being relegated. By the abolition of private ownership,
Russia has eliminated such of these dangers as have arisen in the
inner circle of late-capitalism but, by virtue of being a self-
sufficient closed economy, has remained unconcerned with the outer
circle of two-thirds of mankind. It will now be our task to find
out how far the U.S., as the leader of late-capitalism, and
Hindustan, as the mirror and leader of the retarded economies,
are likely to overcome these dangers in a constructive way.
Can the leader of late-capitalism assist in rewving the
productive equipment of the retarded peoples? In one essential,
it is differently placed from its west-European or Japanese cousins.
While .these have acquired a peiA^ading interest in retarded eco-
nomies so that they can sell their machines only at the expense
of their manufactures and their machine-tools at the expense of
their macliines, U.S. capitalism has no such burdensome past
except to some extent in the American hemisphere. Its trade
in manufactured goods with the retarded peoples of Asia and
Africa does not pla}' a vital role in its economy. It is free to
sell them machines and machine-tools. It is thus unfettered
enough to transact such trade and investments with the retarded
economies as would increase the yield of their labour-hour. This
introduces a new factor in the fortunes of capitalism. The
prospect is opened out of restoring, perhaps temporaril)’-, the
imperial dynamic, which has ceased to expand with the enmeshing
of the whole world and which has started contracting due to
colonial poverty and obstruction. In making such sales and
investments to retarded economies as they need and not as are
forced on them by westrEuropean and Japanese capitalisms, U.S.
economy can develop their productive capacity, can assist them ,
in producing a very much larger- volume of goods. There is thus
a theoretical possibility that capitalism may yet be able to expand
224
ECONOMICS after MARX
through re-equipping the colonial economies, where alone expan-
sion is still possible.
Against this theoretical possibility must be set the peculiarly
self-sufficient character of U.S. economy, which distinguishes it
from that of its west-European and Japanese cousins. The U.S.
has much to give, but it can take very little. It is the leading
producer in the world not only of producer’s goods and manu-
factures but also of food and raw materials. The other capital-
isms are great consumers of food and processors of raw materials
extracted from retarded economies; they thus maintain the
gigantic town-village relationship between themselves and tivo
thirds of mankind. U.S. econom}"^ has worked out this relation-
ship largely within its own frontiers, beaten it into a land of
balance in the use of science, so that its great industrial production
is matched by an equally great agricultural and mining production.
The U.S. may be willing to sell machine-tools for the manufacture
of locomotives or small dynamos and also it may be wanting to
increase its export in radios or fountain-pens; in this quest, it
would want an expansive economy in the retarded areas, but what
would it talce in exchange, not food-crops, not fruit, not meat, not
cotton, not iron, not petrol, no manufacture of mass-use, not any
kind of the staple goods that are the bulk of world-trade. U.S.
can give, but it cannot take; this hamstrings the leader of late-
capitalism in its effort to shunt world-trade to the new rails of
two-way expansion. If other capitalisms are unable to expand
world economy for fear that this would hurt them, the leader of
late-capitalism may find that, w'hile it had little to fear, its hopes
were also ill-founded. It is, however, possible to exaggerate
the inability of U.S. economy to take, as it appears to us in the
immediate present. With an expanding equipment in the retarded
areas, the furs of Sinkiang, the silks of China, the brocades of
Hindustan may come into such mass-use of the U.S. population
as to become articles of bulk-trade.*
* It wouldn’t be such a fanciful thing if the U.S. handed out scrips
to its citizens for travel and stay in those areas from which it would not
otherwise receive payment. Such travciships could be granted on the close
225
15
FRAGMENTS OF A WORLD MIND
It is also possible that the retarded peoples, through theit
scientific ingenuit}’’ and collective effort, may yet produce new
g’oods and raw materials to enliven world trade, but that can only
come out of their free endeavour and no outside agency can
awaken it.
The leader of late-capitalism would, in addition, be unable
to use to the full its capacity to re-equip the retarded economies.
To U.S, has fallen the leadership of an economic system that has
reached maturity and, as such, it would be unable to interfere too
much with the existing arrangements. The west-European capi-
talisms, ably supported and rivalled by the Japanese, have knit
up the larger part of the retarded world into a political rule that
guarantees the working out of the town-village relationship. The
U.S. must accept these different imperialisms as so many agents
of stabilitj' and, when it is not at war with one or the other, it
must work in collaboration with them. There may be an under-
current of hostile competition, there may at times be bitter clashes
and wars may not al\\'a3's be avoidable, but, as a general measure,
the U.S. must accept these imperialisms as stabilising agents in
an otherwise uncertain and unforseeable world. The retarded
peoples themselves may hold quite another view of what would
really constitute a stable world, but the leader of late-capitalism
would need an incalculable courage to experiment with a stability
that is yet to emerge. Calculably, therefore, the U.S, would have
to compromise with imperialistic trade policies and its supply of
of secondarj' studies or marriage or some such general occasion applying
to all citizens and the internal arrangements between the U.S. government
and the investors and exporters would not be impossible to make. It is
however doubtful if even the U.S. could summon up sufficient courage to
do this for the mass of its citizens. Likelier it is that the U.S, would
want to become monopolist, the collector of old treasures and the user
of new luxuries of the wide world. That travelships or treasures would
raise the U.S. so infamously above the rest of the world in luxury and
in what is kmown as culture is a moral fact with which we are not here
concerned. But, while we may think out ail the possible ways in which
U.S. could receive payment from other economies, let us not forget that
the debts and reparations owed by post-1919 Europe were defaulted, partly
because Britain and Germany were not over-particular about their credit,
hut more so because the U.S. had no use for their manufactures or raw
materials.
226 ,
ECONOMICS AFTER MARX
producer’s goods to retarded economies would be limited. In
addition, U.S. capitalists would prefer to transact their sales and
investments with groups of capitalists among the retarded peoples,
rather than encourage a socialist reconstruction. Although this is
a question which we will yet examine in greater detail, it is cx-
tremel}' doubtful if the re-equipping of retarded economies can be
carried out by their capitalist classes.
But U.S. economy will be forced, to whatever extent it can,
to expand its dealings with retarded economies. Its state of
continued slump will force it to do so. It cannot continue on a
basis which compelled its index of producer’s goods to fall from
100 in 1927 to 87 in 1937 and 54 in 1938, and certain inteirening
years were worse, while that of Britain rose to 133 in 1937 and
199 in 1938. Not all of America’s fall or Britain’s rise could be
explained by the arms industries ; a considerable part of it was due
to the same conditions, which made the rate of industrial profits
in the U.S. fall from 12-8 per cent in 1929 to 2 per cent in 1932,
6-7 per cent in 1937 and 3*8 per cent in 1938, while that in Britain
was maintained at the comparatively steady levels of 10*5 per cent,
8-5 per cent, 11*2 per cent and 12 per cent in the same years.
It is significant that the majority of U.S, manufacturing com-
panies registered negative rates of profit for the years 1931 and 32.
The U.S. cannot fail to notice that Britain is able to steady its
fall by the use of the external dynamic, which, although deterio-
rating, is still capable of providing replacement orders and limited
quality consumption. U.S. economy, however, has completely
exhausted its internal dynamic and also such as it could get from
the American hemisphere, with the result that, if it is to save
itself, it must hit out for an e.xternal dynamic, which may, be
enlarged while being used. Recent developments are arousing a
kind of vigour, albeit naive, that aspires to cope with this task.*
* Let us first acquaint ourselves with the vast increase in U.S. pro-
ductive capacity that has taken place as a result of the war. A Federal
Reserve Board inde.x places industrial production in 1943 at 2-4 times the
average of 1933-39. It is tlius roughly, three-quarters over again of the
1929 production. Less than 30 per cent of this production is for civilian
use, while the rest is war-goods, which have gone to different pans of the
world. What will happen to this enormous productive capacity when it is
227
ECONOMICS AFTER MARX
collaborate with existing imperialisms for being agents of stability
and the comparative inability to receive a large volume of goods
from other economies. It is easy to see that this is an exceedingly
divided position. The only positive results that may be expected
from it are some displacements of the existing volume of world-
trade* and soihe expansion of the retarded economy of China as
is not politically enslaved. The pressure of TJ.S. economy may
also compel its capitalist-imperialist cousins to permit or undertake
a very limited expansion of the colonial equipment. For the rest,
the TJ.S. will play a pervadingly obstructive role. If it will
obstruct the west-European and Japanese capitalisms in stabilising
'the colonial peoples as the untouchables of the capitalist system,
it will also obstruct the retarded peoples in availing such oppor-
tunities as make for a sharp break wdth the past. That it will
thereby be unable to prevent successive fall in the use of its own
productive capacity or genuinely exjiand the productive equipment
of the retarded peoples can be said without hesitation. It will
not have provided a positive dissipation of the severest danger to
world economy. How long it will be able to delay the hardening
of declining capitalism into a world-wide caste-structure or the
advent of a wholly liberated world economy is another question.
The world-index of production and its tendencies would show that
either the one or the other must happen well before our century
is out. Capitalism must either harden into a world-hierarchy of
castes or it must be blown up with the advent of liberated eco-
nomies and the U.S. will meanwhile obstruct either solution and
be generally negative. In its recentmqst development with regard
* In an earlier chapter, we have seen how the war is causing shifts
in world trade and productive capacities and how this, combined with
other factors, is causing the relegation of wcst-Europcan economy. There
seems hardly a doubt that the U.S. will try to make full use of these shifts
for its post-war economy; its world-shipping, air-traffic, trade in machines
and goods, foreign investments arc bound to grow at the expense of tlic
west-Europcan economies. At the same time, this growth will be unequal
to the needs of American economy, so that, inspitc of the continental shifts
in favour of the U.S., the major fact of colonial poverty and obstruction
in conjunction with the hca\'y mechanisation of capitalist economics will he
there to cause the relegation of U.S. economy. That the process of this
relegation will be different and will produce different consequences has
already been indicated.
229
FRAGMENTS OF A WORLD MIND
to retarded equipment, U.S. economy is showing a tendencj' to
divided interests and delaying action. The leader of late-capitalism
has, thus, about already relinquished its leadership of the colonial
peoples ; will they submit by becoming increasingly star\'ed helots
of- a declining capitalism or will they rise into manhood?
The technical danger in the U.S. can be assessed from the
fact that, while' the index of total production fell from 100 in 1929
to 73 in 1938, the output per man-hour rose from 100 in the
earlier to 116 in the later year. Scientific and organizational im-
provements are continually increasing the yield of the labour-hour,
but there cannot obviously be a corresponding and unceasing
increase in the production of known goods. The hours of work
must therefore be reduced or men thrown out of work and it is
usually the second alternative which materialises. The shock of conti-
nuous improvement in the known lines of hea\ 7 - mechanisation
and mass-produced goods can only be observ'-ed if scientific vigour
can at the same time create new mass-wants and the means to
satisfy them. Aside from the question whether each continuous
expansion of wants is desirable, the U.S. experience shows that
it is no longer possible. The great new line of which much is
being made today is air-traffic. According to a U.S. statement,
the air-craft industr}^ and the traffic personnel would in coming
years give work to anjwhere between 6 per cent and 10 per cent
of the entire population This appears a highly inflated estimate,
but, were it true, it could only be effected largely at the expense
of rail and ship traffic. As such, it would not be the creation of
a wholly new work. Although scientific vigour is abundantly
improving known lines and synthetics, there is not adequate ew-
dence that U.S. economy could match it by hitting out into wholly
new venues. This will cause a forced depression in technical
progress from one industr)’^ to another ; there will be no unhurried
and balanced use of science and stability -will not come.
U.S. science is, how'ever, not oblivious to the problem
of flexible and small-unit technics. The w'ar has, for instance,
given it the jeep. This is a kind of maid-of-all-work; it can
plough the fields, furnish power for milking, in addition to being
230
ECOKOMICS AFTER MARX
an auto. The U.S. Department o£ Agriculture has calculated that
the jeep can do the job of a heavy tractor with the petrol con-
sumption of a half gallon to the acre, in place of the tractor’s 3-3
gallons. There can be no better illustration than the jeep of the
new technics that we must strive for ; all-purpose, small capitalisa-
tion, low running expenses. In like manner, U.S. exporters are
• reported to be busy perfecting small dynamos for use in retarded
economies, which would cost 15 dollars to the horse-power in place
of the former 40 dollars. All these experiments in small-unit
technics are, indeed, offshoots of an economy that promises to
remain predominantly large-scale and heavily mechanised. The
U.S. can no more make a sharp break with traditional technics
than west-Europe can. Nevertheless, these experiments and •
others being made on the uses of low-watt units may inspire
•retarded economies to base their industrial renovation on a pur-
poseful striving after small-unit technics.
U.S. science will yet add to the amenities of life, it will give
gas that heats and also cools, it will give new materials like
plastics and new fibres to wear, new drugs and surgery and, of
course, new weapons of war when needed and, on the whole, it
will make life more comfortable, at least, for the majority of its
citizens. But, beyond grazing the problem of small-unit technics
and thus maturing it slightly, U.S. science will not have provided
a new technical base that can sustain a more purposeful production,
distribution and defence.
231
