In the 1960's, capital is only interested in responding to increased demand by increasing supply on the basis of existing technologies, just adding to its stock of them, and so employing additional labour with it (extensive accumulation). Marx explains why that is. Capital only invests in new types of equipment where the cost of that equipment is less than the wages it saves by doing so. But, wages are only a fraction of the actual value created/labour undertaken by workers (the basis of surplus value). Its only when wages rise significantly, and squeeze surplus value/profits that the incentive to invest in innovation and new equipment becomes overriding.
As Marx points out, this is why the worker cooperatives were always more innovative and productive than private capitals. For workers, its not a question of whether a new piece of equipment costs less labour in its production than the wages it saves in productive use, but whether the labour it costs to produce is less than the total labour it saves in productive use. Connolly made the same point about the introduction of new machines by the Ralahine Cooperative.
“To those who fear that the institution of common property will be inimical to progress and invention, it must be reassuring to learn that this community of ‘ignorant’ Irish peasants introduced into Ralahine the first reaping machine used in Ireland, and hailed it as a blessing at a time when the gentleman farmers of England were still gravely debating the practicability of the invention. From an address to the agricultural labourers of the County Clare, issued by the community on the introduction of this machine, we take the following passages, illustrative of the difference of effect between invention under common ownership and capitalist ownership: –
“This machine of ours is one of the first machines ever given to the working classes to lighten their labour, and at the same time increase their comforts. It does not benefit any one person among us exclusively, nor throw any individual out of employment. Any kind of machinery used for shortening labour – except used in a co-operative society like ours – must tend to lessen wages, and to deprive working men of employment, and finally either to starve them, force them into some other employment (and then reduce wages in that also) or compel them to emigrate. Now, if the working classes would cordially and peacefully unite to adopt our system, no power or party could prevent their success.”
(Labour In Irish History)
The idea that Wilson promoted in The White Heat of Technology, and the associated proposals for national economic planning and so on, were the ideas of progressive social-democracy founded upon promoting the interests of large-scale, socialised capital. But, to be successful, the same social relations of the cooperative, needed to be replicated across the economy. In other words, that large-scale socialised capital of the joint stock company/corporation was already the collective property of the associated producers (workers and managers), but those workers and managers, unlike in the cooperative, did not have control over that capital. Control rested in the hands of shareholders, and their appointed Directors, who served not the interests of the firm, but the shareholders. The shareholders, had no more incentive to introduce labour-saving machines to lighten the labour of the workers than did the old private capitalists. They were only interested in doing so if the cost was less than the wages it saved, so as to boost profits, and so, enable their dividends to be increased.
Its only in the 1970's, that the logic behind the earlier proposals forces its way through into the progressive social-democratic demands for industrial democracy, in the shape of the Bullock Report, and the EU's Fifth Draft Company Law Directive. But, by that time, the conservative social-democrats were asserting their dominance, as capital entered a period of long wave crisis, followed by the period of stagnation from the mid 80's, through to 1999. And, in the 1970's, and particularly the 1980's and 90's, when firms do have an incentive to invest in innovation and technological development, to replace labour and push down wages, the motivation for the investment is not to do so in order to increase output, or lighten the burden of labour, but is to produce the existing levels of output with less labour, and so at lower cost, and, thereby, to make labour redundant, and reduce wages, which itself is the cause of periods of economic stagnation rather than growth, of the growth of net output relative to gross output.
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