Rationalisation further considered—Can it raise the working-class standard of life?—The experience of Germany and America—The displacement of labour by mechanisation—Why rationalisation is inevitable—But unlikely to advance very fast—The attitude of British employers— Lord Melchett's policy—The legal position of combines in Great Britain—And its effect on the forms of industrial combination—Should the law be amended?— Instability of certain forms of combination—Does it benefit the consumer? —Probable tendency of capitalist policy—Breakdown of divisions between industries—Need for State control of combines and State action to regulate their membership and policy.
It has been suggested in the foregoing chapter that the 'rationalisation' of industry along capitalist lines offers no remedy for the present disease of our economic system. It breaks down because, while it might succeed in improving very greatly the efficiency of production, it is doomed to fail hopelessly in solving the problem of distribution. It might succeed in lowering substantially the cost of producing each unit of the national output; but it would only find itself unable to make use of the great new productive power of which it had become the master. For the problem of production cannot be solved unless the problem of distribution is solved with it; and the lowering of the unit cost of production, unaccompanied by a pouring of fresh purchasing power into the pockets of the consumers, will only mean a more determined policy of restricting output, and a widening circle of unemployment.
The advocates of rationalisation commonly urge that this difficulty can be avoided by raising wages as output expands, so as to give the workers some, but not all, of the benefit of the greater efficiency of production. By this method, they suggest, the market will be widened, output enabled to expand at a