For example, in agriculture the absolute number of workers employed fell, as productivity rose. But, more were employed in manufacturing. Today, productivity has increased the output of manufacturing industry so that the number employed in it is falling, whilst the number employed in service industries has risen as these now constitute around 80% of the economy.
“At any rate, it is but a requirement of the capitalist mode of production that the number of wage-workers should increase absolutely, in spite of its relative decrease.” (p 263)
Marx seems to have made a similar miscalculation to Keynes here. Keynes believed that this continually rising productivity would result in a steadily rising level of leisure time for workers. A sort of social revolution by stealth would then result; not that Keynes envisioned this social revolution resulting in Socialism, only in a version of his Liberal egalitarian ideal. Marx had no such illusions that capital would simply hand over the benefits of such rises in social productivity to workers, rather than using it to boost its profits. If workers benefited it would only be as a result of the rise in their living standards, as capital sought to sell them ever wider ranges of use values.
But, Marx writes,
“Labour-power becomes redundant for it as soon as it is no longer necessary to employ it for 12 to 15 hours daily. A development of productive forces which would diminish the absolute number of labourers, i.e., enable the entire nation to accomplish its total production in a shorter time span, would cause a revolution, because it would put the bulk of the population out of the running.” (p 263)
But, this rise in social productivity went way beyond this without causing a revolution. In part, that was because capitalism was extremely inventive in creating ever new industries to soak up the relative surplus population alongside the released capital. In the 19th century, and early 20th century, large numbers of freed workers were also employed as domestic servants rather than productive workers.
But, at the end of the 19th century, as Engels describes, the dominance of the large companies, with increasingly planned production, tied to increasing state planning of the economy, and the supply of labour-power via the Welfare State, was able to continue to increase profits, whilst offering workers a steadily rising standard of living, including reductions in working hours, increases in paid holidays, etc. and thereby to consolidate its rule, and its dominance over the older exploiting classes and sections of small capital. It was the establishment of bourgeois social democracy.
At the level of the enterprise, it was symbolised by Fordism, at the level of the state, particularly after WWII, it was symbolised by Keynesianism and the Welfare State.
That is not, in any sense, to suggest that these developments lead to a crisis-free capitalism. For one thing, the “plethora” of small capitals continues to dominate the economy numerically, even as the big capitals dominate it economically. The interests of big capital determine the basis of the state, but the interests of this plethora of small capital, along with the interests of the owners of fictitious capital, continues to play a political role via conservative parties. All of the same laws continue to apply to this plethora of small capitals, and whatever the long-term planning of the big corporations, they still risk being thrown into the air as a result of a crisis of overproduction affecting all these small capitals.
Given that it is these small capitals that are the first and hardest hit by any crisis, and given that they account for the bulk of employment, any serious crisis affecting them affects the demand for the commodities produced by big capital. Indeed it is to limit this effect that the Welfare State is designed to intervene via the so called automatic stabilisers.
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