Alan Greenspan used to say that if it was possible to weigh the US economy, it would be getting lighter. Greenspan was making a point that I have been making for more than a decade. That is that as modern capitalist output increases, the mass of materials involved in the production of it is not just getting relatively smaller, but is now also getting absolutely smaller. This is the opposite of the condition that Marx described in his Law of The tendency for The Rate of Profit To Fall.
In that Law, Marx sets out that, as fixed capital replaces manual labour, the productivity of labour rises. Marx was dealing with economies in which the physical production of material commodities dominated. This rise in productivity is manifest in the fact that a given mass of labour processes ever larger masses of raw material. The labour is the source of new value production, and thereby of surplus value. The raw material represents circulating constant capital. So, as a given quantity of fixed capital and of labour processes an ever increasing quantity of raw material, this means that the proportion of the value of final output accounted for by fixed capital (wear and tear), and by labour, declines, whilst the proportion accounted for by raw material progressively increases. As the proportion of raw material rises relative to the value creating substance - labour - so this means that c rises relative to s, the surplus value, so that the rate of profit falls.
Marx himself recognised a number of factors that counteracted this tendency, which he said was, in any case very small, and only visible over long periods of time. One factor that Marx noted was that the same technology that brings about this rise in productivity, also brings about changes in the materials that are used, and in the way those materials are used. New materials are introduced that are cheaper, or more durable and so on than previous materials. Ways of using materials that reduces waste are introduced, waste is used to produce biproducts and so on. But, new ways of using existing materials are introduced that means fewer of them are required. For example multiple condensing, high-pressure boilers meant that a given amount of coal would produce ever increasing amounts of power.
What Greenspan was reflecting was the fact that now, new technologies, particularly materials technology means that its possible to get more bang for your buck. The same output can be produced, not just with less labour, and less fixed capital (which has itself become ever more productive as new technologies have replaced older technologies), but also with less raw material.
This data is set out in Andrew McAfee's new book, More From Less. McAfee sets out that the US now produces more industrial output than in the past, but does so whilst consuming less steel and other raw materials. What is more it does so without using more energy either. McAfee has made a wager that in ten years time, the US will be using less energy than it does today, no matter how large its economy has become. His bet is based upon this same principle that rapidly improving technology means that more output can be produced both with fewer raw materials, and with less energy to process them.
This argument is not even taking into consideration the argument I have set out elsewhere that a 80% of the economy today is involved in service industry, which does not process raw materials. It is stating that even if manufacturing output itself expands considerably, the increased output will not require more raw materials or more energy to achieve it.
I described this basic argument more than ten years ago, That is today its not just a matter of the use of new materials like carbon fibre in place old, such as steel, or fibre optic cable in place of copper cable, but that entirely new types of products replace old types of products, and these new products, themselves often multifunctional, replace older types of products that required far more materials for their production.
Take a TV, in the 1950, even with tiny screens, they came in large wooden frames, with large speakers; the screen itself was a large chunk of glass at the front of a cathode ray tube, and the electronics behind it involved a multitude of glass valves that consumed large amounts of energy. Today, a 55" LED Smart TV uses only a fraction of the materials used in a 1950's TV, and a fraction of the energy to power it. But, it provides far more facilities than a 1950's TV, not juts in terms of colour, size and quality of picture, but access to Satellite, Internet and so on. Or take an old Bakelite land line telephone as they existed up to the 1980's. In the 1980's, the first mobile phones were introduced that were themselves like house bricks, but each year they got smaller, and more powerful and functional. Today's smart phone uses a fraction of the materials of a 1980's land line phone, despite the fact that its not just a phone, but a camera, an entertainment platform, a means of accessing the Internet and so on. Moreover, the infrastructure required to service a mobile phone network uses a fraction of the materials that were required to service the old landline telephone network.
McAfee's book is a good antidote to the various catastrophist theories, whether of the environmentalists, or the prophets of capitalist collapse due to the law of falling profits.
Of course a smartphone uses less materials than a clunky landline phone of the 60s, but in a modern smartphone you will essentially find every non-radioactive chemical element there is and the environmental and resource cost of producing those and the means or producing them in turn are enormous. All that doesn't appear in the final product, it's silly to just compare physical objects and don't consider the cost of the processes that give rise to them. I'm note even mentioning how my granny used the same phone for 35 years whereas smartphones are designed to last a year and what has to happen to them after that. Not surprisingly then, the relationship between global material use and GDP shows that material use has been rising at a faster rate than GDP.
ReplyDeleteBy the way looking at some of your digital uttering made me chuckle. You are really the most confused Marxist out there. If I find some time this week i'll write something about your post claiming that value is a transhistorical category. I mean, how are you expected to understand anything about capitalism if you don't even get that?
I can't wait to be "educated" by you in Marxist theory.
ReplyDeleteBut, let's start with one of your "facts" above. You say,
"Not surprisingly then, the relationship between global material use and GDP shows that material use has been rising at a faster rate than GDP."
Of course, you provided no actual data to back up this assertion, so let me, therefore, provide you with some.
Global oil consumption rose from 63 million barrels per day in 1980, to 85 million barrels per day in 2006. That is an increase of 35%. But, between 1980 and 2012, Global GDP increased from $18.8 Trillion to $71.8 Trillion (1990 dollars). That is an increase of 282%! Even allowing for the 6 years difference in periods that means that global GDP rose by around seven times the increase in oil consumption. That is also despite the huge growth in the number of cars in places like China, which is now the biggest car market in the world. The reason that oil consumption has increased by only a fraction of the increase in global economic growth is because huge advances have been made in the efficiency of oil use. That is why in the 1970's a four fold increase in oil prices sparked a global slump, but from the late 90's a ten fold increase in the price of oil has not.
I'm afraid that your "facts" in relation to other forms of material consumption relative to GDP are equally bogus.
As for the "education" you promise in relation to "value", I can't wait, because if you don't recognise that value is transhistorical, that, for example, Engels in his Supplement to Capital III, says that the Law of Value has operated for around 7,000 years, then you clearly do not understand anything about Marxist theory, and so its no wonder you cannot understand what is specific about the way the Law of Value operates and manifests itself under capitalism as against previous modes of production, and therefore, what distinguishes this mode of production from its predecessors!
as for the first point:
ReplyDeleteHere you can find a dataset about global material use:
http://www.materialflows.net/
When (rather than focusing one one country and one resource as you do) you look at global material footprints you see that it correlates with GDP growth, in recent years exceeding it. Whatever point can be made from this, decoupling is clearly not happening.
Now, it's no wonder that you cite Engels when I ask you about Marx and value.
I can see no confirmation of your claim in any of the data presented in that website. Perhaps you would like to give us the actual data and correlations you assert exist.
ReplyDeleteYour comment about Engels is just bizarre!
Perhaps then you prefer Marx's own comment in the Preface to Capital I,
"The value-form, whose fully developed shape is the money-form, is very elementary and simple. Nevertheless, the human mind has for more than 2,000 years sought in vain to get to the bottom of it all".
Or there is his whole comment in his Letter to Kugelmann,for example,
"The unfortunate fellow does not see that, even if there were no chapter on "value" in my book, the analysis of the real relationships which I give, would contain the proof and demonstration of the real value relation. The nonsense about the necessity of proving the concept of value arises from complete ignorance both of the subject dealt with and of the method of science. Every child knows that any nation that stopped working, not for a year, but let us say, just for a few weeks, would perish. And every child knows, too, that the amounts of products corresponding to the differing amounts of needs demand differing and quantitatively determined amounts of society’s aggregate labour. It is self-evident that this necessity of the distribution of social labour in specific proportions is certainly not abolished by the specific form of social production; it can only change its form of manifestation. Natural laws cannot be abolished at all. The only thing that can change, under historically differing conditions, is the form in which those laws assert themselves."
Or maybe, a comment from Marx not about pre-capitalist modes of production, but the post-capitalist society,
"... after the abolition of the capitalist mode of production, but still retaining social production, the determination of value continues to prevail in the sense that the regulation of labour-time and the distribution of social labour among the various production groups, ultimately the book-keeping encompassing all this, become more essential than ever.” (Capital III, Chapter 49)
I await your further "education" on matters which you clearly have little understanding of.
While I'm waiting here's another actual fact as opposed to fake news for you to chew on.
ReplyDelete" The report finds that global material use has tripled
over the past four decades, with annual global extraction of materials growing from 22 billion tonnes (1970) to 70 billion tonnes (2010)."
(International Resource Panel Report.
By comparison, global GDP in 1970 was $12 trillion and in 2010 was $62 trillion (constant prices). In other words it was more than 5 times as great. That means that global GDP grew by 40% more than the growth in total material consumption. Moreover, it is since the mid 1980's that the major developments in technology, and material science have brought the largest improvements in efficiency in material usage, so that, if we were to compare GDP to material usage say from 1985 to 2015, we would see an even greater divergence between material usage and GDP growth.