Could there not be conditions, however, where fixed capital, i.e. machines/robots, simply replace labour, so that less labour is employed absolutely, and where the mass of surplus value, thereby also declines, even if the rate of surplus value rises? Yes, there could. That is the thesis that Paul Mason has put forward in his book “Post-Capitalism”, and Marx himself, as Paul points out, undertakes a thought experiment, in his “Fragment on Machines”, in The Grundrisse, to that effect. However, the question is not whether such a possibility exists theoretically, but whether that theoretical possibility reflects current reality. It doesn't.
The basic argument is suggested by Marx in Capital III, in discussing the Law, when he points out that there are limits to the extent that rising productivity, which raises the rate of surplus value, can counterbalance the fall in the mass of surplus value produced, as a consequence of a fall in the mass of labour employed. As Marx says, 2 workers working a 24 hour day, of which 23 hours is surplus value, produce less surplus value than 48 workers working a 24 hour day, of which only 1 hour is surplus value. But, Marx's own explication of the Law is one in which, the mass of labour rises, not falls. The mass of employed labour only falls relative to the total capital, and total value of output. And, along with it, the mass of surplus value produced also rises absolutely. It again, only falls relative to the value of total output, and relative to the capital laid out to produce it.
If we take the example of the hotel, as described in Part 3, if the cost of building a hotel halves, so that now a 200 room hotel can be built for the same cost as previously was required for a 100 room hotel, and if new machines, enable the existing workers to be able to service these 200 rooms, then there is, in fact, no change in the organic composition of capital, and no basis for any change in the rate of profit. The only thing that happens here is that the value of a room halves, so that the value of each room, now also contains only half the value of fixed capital, wages, and profit, as was previously the case. Yet, it is as though the new machines replaced half the workers, because the same number of workers now service twice as many rooms. This is effectively no different to the examples that Marx gives, whereby the productivity of labour rises, because it is employed on more fertile land.
Put another way, had only a 100 room hotel been built, it would have had a value of only £50,000, and only 5 workers would have been required. Wages would fall to £5,000, and £5,000 of profit would now be produced. The mass of profit is thereby halved, but the rate of profit remains the same. But, now, £55,000 of capital has been released, and there is nothing stopping this capital being employed in some other sphere, for example, in a hotel elsewhere, in which case the mass of profit would again rise to its former level. But, also, as Marx describes in Theories of Surplus Value, this rise in social productivity necessarily has other consequences. It not only reduces the value of fixed and circulating constant capital, it also reduces the value of labour-power, and thereby raises the rate of surplus value. In the above example, the rate of profit remains the same, but that is because no change in the rate of surplus value is assumed. If we take into account the fall in the value of labour-power that also arises from this rise in productivity, then the rate of surplus value must rise, so that the rate of profit then also rises.
And, in fact, I have set this out, previously in discussing Paul Mason's argument, and Marx's discussion on the role of machines, as set out in Theories of Surplus Value.
As Marx points out in Capital I, there is a difference between a situation where a machine is introduced, which replaces existing workers, and a machine that is introduced that simply does the work that workers otherwise might have done.
In Chapter 15, he writes,
“If it be said that 100 millions of people would be required in England to spin with the old spinning-wheel the cotton that is now spun with mules by 500,000 people, this does not mean that the mules took the place of those millions who never existed. It means only this, that many millions of workpeople would be required to replace the spinning machinery. If, on the other hand, we say, that in England the power-loom threw 800,000 weavers on the streets, we do not refer to existing machinery, that would have to be replaced by a definite number of workpeople, but to a number of weavers in existence who were actually replaced or displaced by the looms.”
And, the important distinction here, as Marx points out is also a question of time. The 800,000 weavers actually replaced by power-looms, could not immediately be employed in some other work, as the bourgeois apologists suggested, for example, producing power-looms. But, that does not mean that the rise in productivity that the power-loom, and other such technologies brought with them, did not, thereby raise the rate of surplus-value, make possible the greater accumulation of capital, and thereby the future employment of even greater masses of labour; nor did it mean that in cheapening these elements of capital, via moral deprecation, it does not again make possible the employment of greater masses of that capital; nor did it mean that in cheapening the value of clothing and other commodities that comprise wage goods, it did not reduce the value of labour-power, so that a given amount of capital is able to employ a greater mass of labour than previously. It is only, as Marx sets out, that it is usually not the displaced workers who fill these additional jobs, but their children.
If we examine the reality of the 150 years since Marx wrote Capital, or the 200 or so years since the inception of industrial capitalism, despite massive transformations in technology, and the revolutionising or production, we have not seen a continual growth of unemployment, but the opposite. It's certainly true that this development of technology has seen the agricultural workforce decline massively. In the mid-19th century around 2 million people worked in agriculture, in the UK, which has now fallen to around half a million. As a proportion of the total workforce, however, the number employed in agriculture has fallen far more dramatically, down to just around 1.3% of the workforce. Yet, this decline has not resulted in all of those agricultural workers being unemployed. In the 19th century, as the proportion of agricultural workers declined, the proportion of industrial workers rose. And, indeed, the absolute number of industrial workers rose too.
Marx notes that, as technological development took place in industry, this too resulted in displaced workers being employed unproductively as domestic servants etc. Yet, this too was only a temporary situation, because as that same technological development made possible a further accumulation of industrial capital, so the number of workers increased absolutely again, and technology was introduced to make domestic labour more productive too, so that the middle classes required fewer domestic servants, and women were also freed from the chains of domestic labour, (or at least those chains were lengthened) so as to be recruited into the ranks of the post-war workforce, as it expanded rapidly.
And, more recently, that same kind of transformation has occurred, with technological developments reducing the proportion of the workforce employed in manufacturing industry, as the the proportion employed in service industry has risen. It is a development I predicted, and analysed more than 30 years ago .
In fact, since the 1980's, alongside a massive rise in technological development, and rise in productivity, we have seen not a rise in global mass unemployment, as workers are displaced, but a more than doubling of the global working-class, making it for the first time the largest class on the planet. Since 2000 alone, we have seen the global working class increase by around a third, and including in newly developed economies like China, the number employed in service industry has risen as part of that process.
Rather than the situation implied in Marx's statement above, therefore, whereby 48 workers, producing only 1 hour of surplus value each, produce more surplus value than 2 workers producing 23 hours of surplus value each, what we have is a growing mass of employed labour, each of which is producing a growing mass and proportion of surplus value. It is more like the situation is one in which the rise in productivity, and subsequent rise in the rate of surplus value, enables a greater accumulation of capital, a greater employment of labour and so a greater production of surplus value and profit.
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