Saturday, 25 July 2015

Marx and Machines - Part 2 of 7

Paul Mason refers to Marx's thought experiment, in the Grundrisse (p 690-712), that has come to be known as “The Fragment on Machines”, where he considers what would happen if a completely automatic machine was developed, which could produce the required means of production, reproduce itself and so on. By removing all labour from the production process, Marx concludes, not only does it eradicate the production of surplus value, but it progressively reduces the value of output itself towards zero, because in each new cycle what is produced not only contains no new labour, but the portion attributable to past labour, embodied in the constant capital gets smaller and smaller.

I remember having a discussion about this back in 1984. We were on a coach, coming back from an NUM rally, with Peter Heathfield, in Crewe, during the Miners Strike. The discussion was actually about the Labour Theory of Value, which I was trying to explain. On the other side, was an orthodox economics lecturer, and listening in was another friend, who was a computer programmer, with no background in economics. The orthodox economist made this point about if labour was excluded, nothing would have value, and this did not seem to reflect the observable fact that all businesses try to reduce labour, by introducing machines, because that is how they become more competitive, and so make bigger profits.

But, I remember my computer programmer friend said that he thought my explanation of this made more sense, and reflected reality, because simple observation shows that, in the very process of replacing labour with machines, the value of commodities quite clearly does get reduced. In any area of production, that is considered, it is the vast increase in productivity, represented by more and more masses of products, being produced with less labour that is behind the fall in prices of cars, TV's and everything else. In fact, it is the vast increase in productivity that has taken place across the globe since the mid 1980's that is behind the low prices of commodities we see today, despite a huge depreciation of paper currencies, which should have led to widespread inflation.

In relation to the situation where all production is completely automated, there are several other reasons why it would have no value, and no potential for surplus value. On a purely practical level, if no one was engaged in wage labour, they would have no wages with which to buy anything, so the output would be unsaleable. For anything to have exchange value, it must be a commodity that someone demands at a given price.

If we assumed no workers, but such fully automatic machines, owned by several people, there would be no basis for the output to possess exchange value, because every owner of such a machine could produce whatever they wanted for free. Even if we assumed that the owner of one such machine exchanged its output for that of the output of another such machine this is not an indication of value. If both commodities are free goods they can still exchange, its just that the value on each side of the exchange is zero! For example, suppose you and I have something like a Star Trek fabricator. If I get mine to produce 2 chocolate bars, and you get yours to produce 2 cups of coffee, I may give you a chocolate bar in exchange for a cup of coffee. It does not mean either have value, any more than had I got my fabricator to produce 1 chocolate bar, and 1 cup of coffee, and you had done the same.

Understanding this idea that Marx outlines in the Grundrisse, is fundamental to understanding his theory of crisis, due to overproduction of capital. Its why, as Paul Mason says, he saw the ultimate development of that process as blowing capitalism apart. We see a hint of it today, with the development of 3-D printers, though I believe their potential is rather over hyped. However, more significant developments are taking place in the realm of nano-technology.

In this area, the potential for a Star Trek type fabricator is not that far fetched. In the same way that a 3-D printer builds up its product by applying layer on layer, nano-technology is able to fabricate by building up atom by atom. With a 3-D printer, I have to be happy with a product that is composed of whatever materials the printer has been designed to use. No such limitation exists with nano-fabrication, because ultimately the fabricator itself fabricates the materials it will use in its fabrication process.

In theory, such a fabricator could extract the atoms it requires from the atmosphere, and then manipulate them into molecules. Undoubtedly, were such a fabricator to be developed, capital would first produce it to reduce its own production costs. But, just as computers, and other such products were quickly turned into consumer products, partly because efficient production requires production on a massive scale, which in turn requires a mass market, so capital would inevitably be led to turn such a product into a consumer product, just as its marketing of washing machines undermined laundries and laundrettes. But, that would spell the end of capitalism, because every consumer would only ever need to buy one such fabricator, and they would never have to buy anything ever again.

Of course, this is a thought experiment like that undertaken by Marx. For now, its like Corporal Jones, going off into the realms of fantasy. But, the underlying principle remains valid, and as stated earlier, it is central to understanding Marx and Engels' theory of overproduction, as I set out in my first book

Part 3 will appear on Wednesday.


David Timoney said...

Boffy, in respect of the economics of a fabricator, you also need to factor in intellectual property. Though the device might produce any material good on demand at zero cost, it would still require the payment of a royalty to whomever held the copyright on that good.

Boffy said...


Firstly, you are confusing price with value. A royalty is a form of rent. It does not add to value. Secondly, this is the problem that the owners of fictitious capital make, of thinking that their fictitious capital is able to expand its value simply out of thin air, rather than requiring surplus value to be produced.

A rent can only be paid, if someone produces, and in the process produces a surplus product. But, also if no one has revenue to buy this good, they cannot give any value for it, in return, with or without the price for it including a rent/royalty. And, as I set out, if you and I both have fabricators that can produce free goods at will, why would I give you anything of value in return for something I could produce for free myself?

Even if I would give you something, and vice versa, it doesn't change the fact that both items on either side of the exchange have no value. In the Star Trek Fabricator example, I could just as easily give you 10 chocolate bars in return for a cup of coffee as give you 1. The reason being that 10 x 0 = 0, just as much as 1 x 0 = 0. There is no rational basis for exchange based on value, because value ceases to exist.

David Timoney said...

Mason is using Marx's concept of "the general intellect", as outlined in The Fragment on Machines, to predict one possible future for information networks: "the mind of everybody on Earth connected by social knowledge, in which every upgrade benefits everybody". I hardly need to go full-Matrix to point out that other futures are possible.

The problem is that Mason's giddy ascent into the realm of speculation sidesteps the material basis of its development, imagining that "peer-production" and the like will supersede existing social relations. While Marx was also speculating, he did at least acknowledge this basis: "The development of fixed capital indicates to what degree general social knowledge has become a direct force of production, and to what degree, hence, the conditions of the process of social life itself have come under the control of the general intellect and been transformed in accordance with it".

In other words, automation means that "general social knowledge" becomes the predominant factor of production, but just as other factors have historically been alienated by an elite, what is to stop the general intellect being similarly expropriated? If commodities are inexorably trending towards zero-cost, I would expect existing capital owners to want to protect their social privileges. Logically, this would require the privatisation of parts of the general intellect, which is where intellectual property comes in. I wasn't confusing value and price but distinguishing between them, suggesting that the latter (in an ever more fictious form) becomes socially dominant as the former declines.

Mason hints at the political bind that this implies ("these micro-level projects [must be] nurtured, promoted and protected by a fundamental change in what governments do"), but I think he remains too starry-eyed in believing that a relentless fall in value will entail a drop in prices to precisely zero. In a world of atomic replicators, a chocolate bar and a cup of coffee might only cost 1p, and so too might a Lamborghini and a Sunseeker (because there is no exchange value), but that 1p is sufficient to maintain exploitative social relations through control of the means of production (now social knowledge rather than fixed capital).

What we might have to do to earn our pennies might appear trivial in contemporary terms (in a world of sex-bots, the IP owners are more likely to demand ritualised forelock-tugging rather than sexual favours), but it will nevertheless represent the continuation of hierarchical control and status.

Boffy said...

The problem here is that, as Marx says, ownership of the means of production necessarily became socialised. The whole dynamic of capitalist production is that the "monopoly of private capital" became an anachronism and a fetter that had to be burst asunder, and was burst asunder, by socialised capital in the form of the joint stock company, and the co-operative. As Engels sets out, that process was given its biggest boost after 1855, with the Limited Liability Act.

Productive capital is then no longer in the ownership of an elite. As marx puts it,

"The capital, which in itself rests on a social mode of production and presupposes a social concentration of means of production and labour-power, is here directly endowed with the form of social capital (capital of directly associated individuals) as distinct from private capital, and its undertakings assume the form of social undertakings as distinct from private undertakings. It is the abolition of capital as private property within the framework of capitalist production itself...

In the last instance, it aims at the expropriation of the means of production from all individuals. With the development of social production the means of production cease to be means of private production and products of private production, and can thereafter be only means of production in the hands of associated producers, i.e., the latter's social property, much as they are their social products." (Capital III, Chapter 27)

As Engels put it, the extension of this is the creation of the trusts, and the rational conclusion of the trusts is state capitalism, as one big capitalist monopoly. For Engels, this presents the ultimate contradiction of what we see today.

Today, we have productive-capital which is socialised (apart from those remnants of small capital where the ownership remains in the hands of private capitalists), and where the role of the actual capitalists has been reduced to merely the providers of money capital, which they give in exchange for fictitious capital, worthless bits of paper in the form of shares, bonds and so on. The interests of this fictitious capital and actual productive capital, represents the crucial contradiction we see today, as I discussed yesterday, in relation to the comments from Clinton and Haldane.

But, that contradiction is most apparent in relation to state capital. There the state has control over the productive-capital. It employs the functioning capitalists, the professional managers to carry out the task of supervision and control, and appoints its own Boards of Directors above them, to look after the interests of the money-capital it loans to such enterprises. It appoints people like Michael Edwards and Ian McGregor in that role.

But, as Engels points out, the actual exploitation with this state capital is completely exposed, because the money-capital provided to the state capitalist for this function, actually comes from the money-capitalists themselves, whe in turn lend it to the capitalist state and obtain interest on these bonds, extracted from the surplus value produced by the state capital. Engels thought that this degree of open exploitation of labour by the capitalist state, with the capitalists reduced entirely to a class of coupon clippers with no relation whatsoever to the production process would inevitably produce a backlash.

Instead, sections of the left, including those that claim to be Marxists, propose such state capitalism, as the means for relieving the exploitation of workers!

Boffy said...


Its possible that in a world of replicators, workers could be reduced to the role of non-productive workers, as Marx discusses in Theories of Surplus Value Part 1. It is the point, made by Ricardo and Marx, which I have discussed in a previous post, and which I will return to in a future part of this series. Ricardo and Ganilh believed that it was the extent of these unproductive labourers that was a measure of the level of civilisation, though for different reasons. Marx saw the potential for that, but was nowhere near so sanguine. He points to the fact, that alongside the rise in mechanisation and rise in productivity also went a huge rise in the number of domestic servants.

Its possible that the owner of a fabricator could take the revenue (in the true sense as means of consumption) it provides, and exchange this revenue against labour directly, as Marx discusses. This labour would not be productive, in the sense that Marx discusses (and Smith defines in parts) of producing surplus value, exchanging with capital, but would create value, i.e. it is the application of labour for the production of use values.

In that case, the domestic servant may well provide the owner of the fabricator with a much greater mass of value than they obtain in return, but for the reasons Marx discusses, this does not amount to an extraction of surplus value, because there has been no exchange of labour with capital. All that has happened here is that the price of the goods exchanged against this unproductive labour is a monopoly price. In fact, for that reason, competition would ultimately be expected to eliminate it.