Wednesday, 18 January 2012


Last night's Horizon on BBC2, was an fascinating programme for anyone interested in Science and Economics. The programme, titled “Playing God”, looked at developments in biotechnology and genetic engineering. It began by visiting a University Farm in the US, where the gene from a spider had been merged with the DNA of a goat, so that the protein, which creates the spider's silk, could be produced on an industrial scale. The silk, which is stronger than any such material that can be made synthetically, has numerous potential functions from industry to medicine. But, this was just the beginning of the kind of developments that are taking place.

Why is this science interesting from an Economists perspective? For the reason described above. Biotechnology, nano-technology and genetic engineering are now making possible the production of whole new ranges of materials, machines and products. These developments have largely been made possible because of previous developments in other areas, particularly that of microprocessors, which have brought about regular and massive increases in computing power. Without that computing power, the sequencing of DNA, for example, would have taken decades. Today, it can be done in weeks if not day. Without the ability to sequence DNA, and isolate the functions of particular genes and sets of genes, genetic engineering would not be possible. Now it is possible to not only sequence the DNA on a computer, but to construct new DNA via a computer model, prior to its actual manufacture in the test tube. There are already moves in the other direction. Computer technology in the future will not be based upon silicon chips, but will be built from organic material capable of repairing itself like any other organism.

But, the reason this is so fascinating from an Economists perspective is this. There area a number of factors which create the conditions for a Long Wave Boom, as opposed to the period of the Long Wave Downturn – which is actually a period of below average growth rather than actual negative growth. One of the most important of these factors is that there has to be the potential for the development of a range of new industries, producing a range of new products, using a range of new productive forces, and new production methods. As Hobsbawm points out in his “Industry & Empire” had the British Industrial Revolution been based solely on the revolution in textile production, it would have failed. Exchange Value is precisely that. It is the value a commodity has in exchange with other commodities. If there are no other commodities, against which some particular commodity can be exchanged, or if there are too few of these commodities, then the Exchange Value, embodied in the particular commodity, cannot be realised, and therefore, the Circuit of Capital (Money – Commodities{Raw Materials, Machines, Labour Power} – Production – Commodity1 – Money1) is broken. The necessary Exchange Value in Money cannot be realised to allow the purchase (reproduction) of the raw materials, Labour Power etc. used up in production, to allow production to continue. In other words, there has been a crisis of overproduction.

What enabled the Industrial Revolution to proceed, and to create a Boom was that, not only was there a Revolution in Textiles, but also there was a revolution in Agriculture, which meant that manufactured textiles could realise their Exchange Value (including the Surplus Value embodied within it) against increased supplies of food. There was a revolution in Iron & Steel production, which meant that Textile manufacturers could realise that Exchange Value in Exchange for machines, that consumed some of this increased supply of metal. There was a revolution in transport, which meant that some of the textile Exchange Value could be realised in Exchange with the owners and builders of canals and railways and so on.

The conditions for the end of the Boom are set in place when the production of all these existing industries, and the products they are responsible for, reaches such a level that much of the potential demand for them has been satisfied, and where no new industries, no new products, have been developed, into which Capital can be diverted, creating new linkages through which Exchange Value can be realised. Under these conditions, it is not just Capital in one industry, which is over produced, which is unable to find sufficient buyers, willing or able to buy its products, at a price that would enable reproduction to take place, but all, or the majority, of industries that find themselves in this position.

Every Long Wave Downturn has ended, and a new Boom started, once these conditions are met, when technological developments make possible a sufficient range of new products and industries, in which Capital can be profitably invested to meet unmet wants and can be realised via exchange with existing commodities. The Long Wave Boom from 1949 to 1974, was a clear example of that, as new types of production such as cars, consumer durables, electronics, chemicals, which had begun to be developed in the 1930's, became major new industries, and in the process created new production methods, new productive relations, and new social relations upon them. That once again confirmed Marx and Engels theory of Historical Materialism, which posits precisely this relationship.

And, in fact, as this new Long Wave Boom develops, we are again seeing exactly this pattern. Much of the old manufacturing commodity production has been relocated to where large supplies of cheap unskilled labour is available. During the period of downturn, the Capital and Labour did not move into new areas of commodity production, because they did not exist in sufficient scale. Unlike the 1930's where that led to mass unemployment, this time it led to Capital and labour moving into various forms of Service production, and into Merchandising (vast excesses of retail developments, large numbers of warehouses on newly developed “industrial” estates) which was financed on the back of huge amounts of private debt. But, during this period, in the background, the same process seen in the past, of the development of new productive forces (microprocessors and the things it made possible such as industrial robots, personal computers, mobile communications, biotechnology and nano-technology) were being put in place. These things are called base technologies. They are the new productive forces that make the new products, industries and production methods possible. Sometimes they are not new, but new applications of old technologies. For example, the ancient Greeks first recognised the ability to use the power of expanding steam to do useful work, but it was James Watt, and Matthew Boulton, who resurrected that technology, and applied it to make the Steam Engine! As increasingly, it has become intellectual production that is the source of new high value commodity production, it is not surprising that much of this development of new base technologies has been done on University Campuses, and in the new Science Parks attached to them.

In the first decade of the new Long Wave Boom, we have only seen a fraction of the application of these new base technologies, and yet anyone older than 40 will recognise what a huge transformation they have brought about during that time. As late as the mid 90's, those who had a personal computer at home were a small minority. Mobile phones were virtually unheard of, and no one had heard of the Internet. The average Long Wave Boom lasts for 27 years, which means that in the remaining 15 years of this one, the scope for the expansion of yet further new industries, products, and production methods is vast. That is so, because the productive forces unleashed by this Boom in the form of the microprocessor, are qualitatively different from all previous developments, precisely because it acts as a huge adjunct to human brain power. The developments in biotechnology and genetic technology, as well as nanotechnology are a clear example of that.

The presenter of the Horizon Programme, Adam Rutherford, described how some of the things that were being done today as a matter of routine, took him years of study, and months of application to do in the University Science Lab, just five years ago. That is the pace of development. One example he showed, I found particularly exciting. He went to visit a Community Centre in the US, where local people from pre-teen kids, to retired people, were learning science by doing it. They were combining DNA to create new life forms. One combined a luminosity gene from sea creatures with the E-Coli bacteria so that it could be seen. This kind of self-organised education, which breaks free of the constraints of State education, is precisely the kind of education that Marx described. But, it is also the kind of development that encourages creativity rather than conformity to established ideas and norms. Those involved, in fact described themselves as “bio-hackers”.

As Rutherford said, what it was reminiscent of was the period during the 1960's and 70's when small groups of teenagers in the US and elsewhere got together in their garages, bought bits of electrical equipment off the shelf from Radio Shack, and began to assemble the first Personal Computers. They turned into Apple, Microsoft and so on. The fact that a lot of this development was once again taking place in the US, should give pause for thought to anyone who thinks that its economy is in a state of rapid, and inevitable decline.

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