These has been so much recent chatter about automation and its precarious effects on the labour market that it’s easy to forget that such chatter has been with us for decades. The 1990s for example saw the publication of Jeremy Rifkin’s The end of work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era. Even further back we find Karl Marx commenting on automation and labour at some length. So why the current hand wringing has taken a hold is anyone’s guess. It doesn’t do any harm to explore some of these previous analyses of automation, purely to gain some much-needed perspective on talk of austerity, precarity and the internet of things. And one analysis that stands out is that of the Marxist economist Ernest Mandel, whose book Late Capitalism provides quite a different take on what we consider the contradictions of capitalism. Not for him the usual focus on automation and its negative effects on consumerism (i.e., no workers to buy goods). He provides a rather different reason why full automation is incompatible with capitalism:
According to Mandel, the process of automation itself is only the outward appearance of what is the essence of the problem, and that is the inherent contradictions of the capitalist system itself. The logic of this analysis can be clarified by beginning with the necessary point of departure for the whole of the capitalist system – the need to increase the average rate of profit. In the era of late capitalism, surplus-profits cannot be realized any longer through regional or international differences in productivity. This is essentially because of generalized automation in all regions and nations, which disallows for competitive advantages for a region or nation based on similar automated processes of production. As Mandel (p192) points out, this role is ‘now assumed by such differences between sectors and enterprises,’ for example, differences between the textile industry and the iron industry. In order to increase profits, therefore, there is a pressure to ‘accelerate technological innovation (p1920),’ that is, the pressure on firms to build better ‘mouse-traps’ in order to compete effectively and get an advantage on competitors. Mandel (p192) refers to the surplus-profits derived from these innovations as ‘technological rents.’ He clarifies their significance for the realization of profits as follows: ‘Technological rents are surplus-profits derived from a monopolization of technical progress, i.e., from discoveries and inventions which lower the cost-price of commodities but cannot (at least in the medium run) become generalized throughout a given branch of production and applied by all competitors, because of the structure of monopoly capital itself: difficulties of entry, size of minimum investment, control of patents, cartel arrangements, and so on (p192).’ The significance of these technological innovations for the era of late capitalism is not the fact that they increase profits for firms, but how they help to increase these profits. The incessant desire to accumulate profits is the raison d’etre of capitalism, but profits can only be gained at the expense of labour (a-la Marx).
In order to explain this, I need to clarify the nature of commodities and the value associated with them, at least from a Marxist analysis. According to this view, the value of a commodity has three components: a) the machinery that went into making it (or more precisely, the depreciation of this machinery from use); b) the raw material used to make it; and c) the labor power that it took to produce the commodity. The machinery and the raw materials are considered constant capital, while the labor power is considered to be variable capital. It is only this variable capital of labor power that produces surplus-value, as the other two remain constant. Basically, machinery and raw materials get paid for, their price determined by the value associated with them on the market. Capitalists, however, can exploit labour in such a way that part of the labour given by the worker goes unpaid. Without this unpaid labour, there can be no surplus-value, and therefore no profit. It is because of this that there is an incessant need on the part of capitalists to keep wages at a minimum. If this cannot be done, there is the ‘inevitable appearance…of attempts to replace living labor power by machines on a vast scale (ch5, p151).’ Increasing automation is a consequence of this need to realize profits, and this fact is more than evident in today’s economy, as more and more living labour is eliminated from the processes of production. It would appear from this analysis that the process of automation is one which capital would strive to forever increase, but it is here that we see the fundamental contradiction of this period of late capitalism. This contradiction relates not to the process of automation per se, but to its increasing generalization and universalization across all spheres and sectors of production. On page 198, Mandel states that the ‘proportion between partial automation and total automation is a crucial problem of the third technological revolution.’ In realms of production that are only partially automated, surplus-value continues to be produced. In realms of production that are fully automated, however, it is an entirely different story: ‘In these realms, the production of absolute or relative surplus value ceases to rise and the entire underlying tendency of capitalism turns into its own negation: In these realms surplus-value hardly continues to be produced at all. The total profit appropriated by firms engaged in these realms is taken from the remaining non- or semi-automated branches. In these latter branches, therefore, there arises severe pressure for substantial measures of rationalization and intensification of production at least partially to bridge the growing differences in levels of productivity separating them from automated branches, since otherwise they stand to lose an increasing portion of the mass of surplus-value produced by ‘their’ workers to their more productive competitors. Hence the phenomena, so characteristic of the past ten years, of speeding up conveyor belts and squeezing the last second of surplus-labour out of the worker (pp198-199).’ The replacement of living labour power by ‘dead’ labour on a mass scale inevitably means a reduction in surplus value. If, across the board in a particular realm of production, there are no labourers to whom labour-power can go unpaid, the competitors in this realm are forced into a situation where none of them can achieve an advantage on the other – that part of the value of the commodity which is variable is no longer there. And because the other parts are constant, they cannot be manipulated to achieve more value on the market. As Mandel explains on page 207, ‘capitalism is incompatible with fully automated production in the whole of industry and agriculture, because this no longer allows the creation of surplus-value or valorization of capital. It is hence impossible for automation to spread to the entire realm of production in the age of late capitalism.’ This statement, of course, contradicts the common belief that, in this electronic age, the use of automated processes of production in all areas of life will eventually lead to the total elimination of labour from the production process, i.e., the end of work. In certain sectors and firms, there will indeed be more or less total automation and, in fact, there already is, but in others, this cannot and will not, at least under capitalism, take place as capital ‘must, by its very nature put up growing resistance to automation beyond a certain point (p206).’ This resistance is evident in today’s economy, and Mandel describes some of its manifestations (p206);
the forms of this resistance include the use of cheap labour in the semi-automated branches of industry (such as female and apprentice labour in the textile and food industries), which shifts the profitability threshold for the introduction of fully automated complexes; constant changes and mutual competition in the production of automated machine complexes, which impede the cheapening of these complexes and hence their swifter introduction into further branches of industry; the incessant search for new use-values, which are first produced in non-automated or semi-automated enterprises, and so on.
So, it appears that technology in the hands of capitalists cannot, by necessity, be generalized and universalized. By its very nature, capitalist automation is primarily a tool of increasing the share of profits, rather than increasing the quality of life. The notion that capitalism’s ability to produce technological innovations can help humanity solve world problems such as poverty, disease, and malnourishment is essentially ridiculed here, as its inherent logic dictates that the control of technology cannot be put into the hands of the masses. It is the uneveness of capitalist automation which Mandel sees to be the defining characteristic of late capitalism and also the root of its inevitable decline as a system. As he states on page 216;
all the historical contradictions of capitalism are concentrated in the two fold character of automation. On the one hand, it represents the perfected development of material forces of production, which could in themselves potentially liberate mankind from the compulsion to perform mechanical, repetitive, dull and alienating labour. On the other hand, it represents a new threat to job and income, a new intensification of anxiety, insecurity, return to mass unemployment, periodic losses of consumption and income, and intellectual and moral impoverishment. Capitalist automation as the mighty development of both the productive forces of labour and the alienating and destructive forces of commodity and capital thus become the objectified quintessence of the antinomies inherent in the capitalist mode of production.
Mandel concludes by arguing (p222) that, because of the wastage that is produced by capitalist automation, the option between socialism or barbarism ‘thus acquires its full relevance today.’ So it should be clear from Mandel’s analysis that he stays firmly within Marx’s own historical materialist account of capitalism and its inevitable decline, owing to its tendency to destroy life as a by-product of the need to produce profits. Technology is in his view, basically a double-edged and ambivalent entity which, depending on whose hands it is in, can be used either to improve the general quality of life, or to hinder the process of development. Essentially his analysis doesn’t veer away from basic Marxist assumptions regarding the inherent contradictions of capitalism, but rather applies these assumptions to the period he describes as late capitalism.