So I've been reading through Capital Vol 1, and one section got me fairly confused about the Marxist position on technological unemployment. The section is the last half of Chapter 15, Section 3(b).
Marx is talking here about the role of machines in production, and says:
He says this contradiction leads to:
And a bit further down the page:
So, if I'm reading this right, Marx is saying that:
1. Capitalists pursue technological innovation because it gives them a competitive advantage. However, this competitive advantage only lasts as long as it takes for everyone to adopt the innovation.
2. Machines cannot produce surplus value. Surplus value can only come from the exploitation of labour.
3. So, to make up for the loss of profit that occurs after the competitive advantage of innovation is gone, capitalists must increase the level of exploitation of labour (by extending the working day, intensifying work, increasing the number of workers etc.)
So surely the implication of this argument would be that technological unemployment cannot happen under capitalism. In order to continue to profit while innovating, capitalists must constantly find new ways of exploiting labour.
Is this the orthodox reading of Marx on this point? Any thoughts/comments? Would this help explain the massive increase in employment tangentially (if at all) related to central production processes?
I should also clarify, when I say technological unemployment I don't mean particular sectors becoming unemployed because of technological change. I mean the idea of technology generally liberating people from labour.
Benjamin Collins
I think that to answer you, marx himself would have simply said "It is inevitable"
And like a Zen master he would have departed, so that you yourself come into the sweet realization later on after much pondering.
Lucas Jenkins
The truth comes about here in what is happening in this day and age. Technology is used for two purposes and they fork not mingling. The one provides research for future capital innovation. The other provides opiate for the "middle men" or petty bourgeoisie. But where is labour increasing if anywhere? In the areas of the less educated world, creatng effectively a serf class of massive racial, cultural, language and literary divide.
The rich have always had at least two or three children for heirs, much more than that and they were all bastard children only given a special place of the man of the house was particularly wealthy.
Now the classes they exploit are being turned to not reproducing when they get threatening and poorer people are exploited.
Look at it you can see it everywhere in the world this class divide and the exploitation. You see further poor areas being used for "sweatshop labour" and the "richer" areas the people are taught about overpopulation while temporary handouts are given to opiate the population into never ever starting a revolution against their oppressors.
Charles Cooper
I'm a newfag but why is it that machines can't produce surplus value while humans can?
Nolan Scott
Yes. The logic of capital is its own accumulation; the maximization of profits is one way to achieve this - which can be accomplished through any of the points (1,2 and 3) that you've made in your assertion.
Since I don't have much time in my hands right now, I'll just suggest this video by David Harvey going through the chapter youtube.com/watch?v=0Lpijzd2fBw
Good luck user, sorry for not being of so much help.
Jack Bell
As someone who hasn't read Marx, because machines don't buy stuff. You need someone to consume the things you produce, producing in and of itself doesn't generate value.
Think of it like this: If every company replaced every worker with machines, leaving the workers unemployed, those companies would almost immediately go under, because suddenly no one is buying their stuff, because no one has any money to buy it with. So despite the fact that all the companies are now much more efficient, they are completely worthless.
All this really goes to show how stupid and self-destructive capitalism is. The moment we stop being able to find new jobs for our population, the entire system is gonna crash. Hard. And then we won't need no revolution.
Tyler White
Surplus-value suggests the existence of not only wage labor, but the social relationship between the capitalist who pays the wage to worker's as a fraction of the value they actually produce, and the worker who sells his labor power in order to survive. The appropriation of a fraction of the value one's labor produces by a wage-paying capitalist is exploitation. Because a machine doesn't need a wage in order to reproduce it's labor, and you obviously don't pay a machine a wage, you technically don't exploit it because it it transferring all of the value, as opposed to a fraction, it produces to the capitalist.
But more generally speaking, in the Marxian context its argued that only humans can create value because of the labor theory / law of value, which maintains that a commodity's value is a direct function of the socially necessary aggregate labor time (SNALT) required to produce it. Even a machine that produces use-value bearing commodities requires maintenance, construction, and eventually destruction by workers, and this is why Marx refers to machines (or constant capital) as "dead labor" - because they are embodiments of the past labor of workers.
To this, capitalists might (as OP said) gain a temporary advantage in terms of profit vis-a-vis other capitalists if they stumble upon a superior technology, but inevitably all other firms will acquire this same technology and immediately mean profit will return to a baseline mean. Now in order to increase profits, firms have to continually innovate technologically in order to further drive the price of x commodity down, resulting in a race-to-the-bottom scenario (known formally as the tendency of the rate of profit to fall) wherein prices are naturally forced downwards. This is (in Marx's view) mitigated through a number of different factors, but this is essentially the thinking.
I think this is a correct reading, up to a point. As superprofits vanish and profit for all capitalists returns to the mean (and this is a very quick process), exploitation must be ramped up and the need for human labor returns, not least because as prices fall more workers can afford the newly cheap goods resulting in an increased need for labor with which to satisfy the newly resuscitated demand. It's not really that black and white though.
Robert Hall
This is worked out more deeply in Volume 3's sections on the Tendency of the Rate of Profit to Fall.
Suffice it to say that individual capitalist does not directly appropriate the surplus value produced within their own firms. Or else there would be wildly divergent rates of profit depending on the composition of capital across private capitals/spheres of production. Given that capital seeks the highest rate of profit, it would leave firms/spheres that provide less profit. Through this movement, the individual appropriation of surplus value becomes the social distribution of surplus value in the form of profit.
Firms with the average productivity receive the average rate of profit and thus approximately receive that surplus value they appropriate. Firms with more productivity, however, are able to sell their commodities at their social value (which is higher than their individual value). These firms extract less surplus value individually but receive the general rate of profit.
On the market, you can't tell if an identical commodity was made by a higher or lower productive firm. Firms have to sell at the governing price. Market conditions here govern price ranges, pushing out less productive firms and granting greater profits to more productive firms. Capital then moves to such firms/spheres though and drives supply in excess of demand, thus pushing down prices and effecting the reciprocal movement of capital.
To put it simply, all these governing movements on an individual level grant greater profits to firms that are making the profit pool smaller for the total capitalist class. Thus, the secular decline in the rate of profit through competition. Capitalists destroy the capitalist by following the laws of capital.
It's a nice, simple, dialectical concept. But it's not a law, it's a tendency. It can be counteracted by like you said, bringing more labor into the system to exploit. The problem is that this requires social coordination and knowledge not available under conditions of commodity production. Capital blindly destroys itself but just as blindly tries to cure itself of its auto-generating disease.
Asher Wilson
Technological unemployment happens when there is no longer a reason to hire anyone anymore. None of this applies when there is nothing left a human could do for you that a machine couldn't.
Dylan Walker
Marx opposed the advancement of technology.
David Morales
Machines have upkeep costs such as energy, lubricant, replacement parts, etc. I tend to think of those as being the "wage" of the machine.
I don't really understand why human workers are given special consideration in Marx's analysis. Capitalism treats workers very much like machines anyway. They are paid just enough to keep them alive and productive.
Ryder Perez
Did he? Why?
Chase Watson
A wage represents the necessary cost to reproduce ones labor, so no, that's not a wage, it's upkeep of constant capital. And that's sort of capitalism's core problem, that workers aren't machines. Slavery would be much more useful for the purposes of profit generation, and in fact a slave is comparable to a machine given that all of the value a slave produces goes to the capitalist in the same way a machines work does, but unfortunately bourgeois democracy and the liberal state were implemented as a response to a historical number of older economic crises, ultimately leading to capitalism (which Marx is specifically bothered with) and wage labor.
Adrian Anderson
Not really. In fact the entire conceptual basis of Marx's theory of history held that in order for communism to occur, capitalism would have to develop the necessary advanced material conditions to allow it's emergence. If anything he opposed it as a means by which to reify the exploitative relationship between capitalist and worker - if technology continually evolved but workers were still denied full ownership and determination of them exploitation was still at work.
Michael Cook
Marx was wrong about some things
Hunter Allen
The other guy didn't answer your question and gave a bad summary of Marx. Marx doesn't actually explain why machines don't add surplus value.
He admits that the use value of a machine can far exceed its exchange value, then later says but this doesn't matter because machines are made by labour themselves and this implies that the total value added by a machine can only be its exchange value.
Either this point is a bizarre insertion of metaphysics or he really wants the (living) labour theory of (surplus) value to be true.
Adam Smith's falling rate of profit argument was the most accurate and best so Marx never needed to ground it in a labour theory of value in my opinion.
Answer though, just read Marx and you'll see why he says what he says. People throwing around slogans or implying the truth of things not argued for are going to say but no this principle and this principle state such and such. The Hegelian move is just go through every position with a fine tooth comb and sublating all the positions that are internally contradictory - Marx's LTV is so.
Lincoln Martin
Thanks for the responses everyone. Certainly an interesting area I'd be interested to see more Marxist writing about.
Thanks for the excerpts. David Harvey's lecture was actually what got me looking into this point!
Seconded. This was may understanding of Marx's arguments about machines. And thanks for the clarification.
Really good explanation, thanks! Guess I'll have to read Vol 3 after I'm finished with Vol 1…
I still don't understand how a wage is different to the upkeep costs of a machine. I mean, an individual worker can leave, but if you consider the workforce as a black-box system then you can always put in a wage and get out work, just like you can put upkeep costs into a machine and get out work.
Josiah Butler
The wage is a means by which the Capitalist system reproduces itself. Machines are the instruments through which Labour as a process realizes this.
Adrian King
Maybe I should rephrase. I don't understand why it is different.
Capitalism is a self-perpetuating system, but only because (within a certain range of material conditions) it represents a game-theoretic equilibrium solution. I wouldn't say wages are any more important than any other component of the capitalist system. As far as I can tell, the only difference between human labour and machine labour is that we place moral value on the wellbeing and happiness of human labourers.
Jacob Turner
Thorstein Veblen is like a more modern Marx who takes automation into account. I suggest you read his works, far better than Marx IMO.
Nathan Baker
Machines can't realize surplus value. Humans, exchanging their labour power for a wage, can.
Do not look at the two analogistically in terms of a moral differentiation in function, but what machinery, as an instrument of production, is, and how it operates in its several uses.
Jeremiah Kelly
But they can. Any useful machine by definition must produce greater value than the cost to run it. If the machine doesn't create surplus value, where does the additional value come from?
Hudson Cook
The exploitation of labour.
Find a reader's guide to Capital.
Isaiah Turner
I'm talking about a system in which there is no labour. An auto-factory which takes in raw materials and churns out useful goods.
Daniel Watson
Such a system of production is not by default free from a system of wage labour because the process itself is automated.
Jeremiah Harris
This is a thought experiment. I'm saying there's no wage labour.
The capitalist pays for goods to be delivered to the factory and sells the products created by the factory. Value is created, but there is no human labour involved. The system is self-maintaining.
Jace Cox
OP you're basically spot on I'd say.
Any improvements to efficiency in capitalism don't shorten the working day or free us up with equal or greater compensation, as they should, but instead lead to unemployment and thus poverty.
Cooper Mitchell
Okay.
Dominic Green
Technological innovation by decreasing the ratio (v/c) should, in pure theory, decrease the possible surplus being generated by an industry and as such decrease the industries rate of profit (s/(v/c)).
However in reality because of intellectual property and patents companies can actually control competition to a degree and extract rent from other companies. Marx doesn't deal with these issues in volume 1 because he's dealing with a purely theoretical free market and focusing on the factory system in volume 1 of capital.
The notion of "fictitious capital" is introduced in volume 3 of capital. Companies never in reality receive back in monetary terms the exact value they generate because finance capital circulates value around the economy. en.wikipedia.org/wiki/Fictitious_capital
This is from volume 3 of capital:
Nathan Evans
When you introduce a new innovative machine which decreases the necessary labour for a company the additional money that company can initially realize comes from the value being generated from other sectors of the economy.
If anyone could copy the machine the disproportionally high profit they can command would diminish.
Capitalist only actually invest in machines to lower their labour costs and increase their profits which causes a rise in both s/v and c/v… in a pure free market this results in a fall in the rate of profit while its mass increases at the same time. A greater proportion, and mass, of fixed-capital to total capital results in a greater proportion, and mass, of depreciation expenses which should turn debt-capital into demand for money which should inflate costs to cover the losses from the fixed-capital which is financed with debt.
Joseph Baker
Labour-power is just a commodity to capital and is subject to the same laws as any other commodity.
Capitalist profit-rate metrics tend to treat wage-labor cost as an expense, not as an investment input/cause of profit. The roots of capitalisms value system is in fixed-capital. Capital computes its rate of profit against fixed-capital as a return on fixed-capital. Fixed-capital is the source of wealth to capitalists and it measures wealth by its accumulated exchange-value. This is why capital chooses to save the market value of its inflated past dead labour over actual living workers as in the 08 bail outs of wall street.
Kayden Edwards
One does not follow from the other.
Example: 1) You have 1000 workers. 2) Then you add machines and you need 100 workers. 3) You fire 900 workers (no money to build another 9 factories) 4) You try to exploit harder remaining 100 workers
Because machines are not humans. They are not the actors in the context is workercapitalist scheme. It is irrelevant whether or not they produce it, because Marx is not discussing some theoretical bullshit. The question is: who deserves to take the money - the worker or the owner of machines.
Unless you are trying to argue that machines should take the money, machines cannot produce surplus value in the context of this discussion.
Kayden Torres
This is the part when you get shot by rebel workers.
Because it is important to give consideration to people who might kill you.
Marxism is about practical things. Not getting killed is one of them.
Isaiah Gray
It's not irrelevant, increased mechanization (in a closed off economy) should lower profitability of the overall economy is the main takeaway. Newly mechanized companies extract their additional monetary profits from the value generation going on in other companies employing wage-labour which allows them to accumulate claims-on-wealth to reinvest and expand. Using Marxs approach of value analysis instead of mere price analysis gets a very different perspective on development.
Marx doesn't deal with issues of finance or ground-rent in volume 1 for a reason, so he can emphasis that the central dynamic of capitalism… under all the higher level stock and bond gambling… is actually the wage-labour relation which mainstream economics tends to forget. The development of capitalism is contradictory and prone to constant crises even without "financial speculation" or any other admixtures.
Ethan Hall
Thanks. This is more the kind of answer I was looking for.
Dominic Green
The meaning of this post eludes me. Examples would be nice. And rephrasing.
1) Who employs wage-labout? Newly mechanized companies or "other companies"? 2) How is it relevant to anything, if wage-labour is employed? Would it change anything if companies are co-op? If no - why are you even specifying wage-labour? 3) What exactly does "claim-on-wealth" (singular, no?) mean in this context? Money? Bank loans? 4) Is it relevant to anything how money will be spent?
Brandon Carter
To all these, I'd like to add that even with mainstream economics automation lowers profit.
Simply put, more automation -> Less workers -> Less consumer power.
Either way, they have to do automation in order to be competitive, they have to lower the costs by firing workers and since everyone is doing this, crisis happens and then part of the production has to be destroyed through war.
