What machines and technology do, is to raise productivity, and whilst the effect of this is to create precarity and misery for those that are actually thrown out of work by it, for a time, it acts to raise living standards overall, to raise the rate of profit, and to stimulate new spheres of production and consumption, and an overall extension of the market, and of employment. Marx, in Capital noted this difference, between machinery that replaces actual already existing workers, throwing them on the dole, and machines that only replace theoretical numbers of workers that would have been required to undertake a given amount of production.
“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.”
(Capital I, Chapter 15)
In actual fact, by raising productivity, it means that the value of labour-power is reduced, and so surplus value is increased, and the value of constant capital is also reduced, so that the rate of profit is raised, and a release of capital available for accumulation is also created. It creates the conditions for a significant increase in capital accumulation, and also of employment.
“This first period, during which machinery conquers its field of action, is of decisive importance owing to the extraordinary profits that it helps to produce. These profits not only form a source of accelerated accumulation, but also attract into the favoured sphere of production a large part of the additional social capital that is being constantly created, and is ever on the look-out for new investments. The special advantages of this first period of fast and furious activity are felt in every branch of production that machinery invades. So soon, however, as the factory system has gained a certain breadth of footing and a definite degree of maturity, and, especially, so soon as its technical basis, machinery, is itself produced by machinery; so soon as coal mining and iron mining, the metal industries, and the means of transport have been revolutionised; so soon, in short, as the general conditions requisite for production by the modern industrial system have been established, this mode of production acquires an elasticity, a capacity for sudden extension by leaps and bounds that finds no hindrance except in the supply of raw material and in the disposal of the produce.”
(Capital I, Chapter 15)
This is also why Michael Roberts' concern over fixed capital investment as a proxy for economic expansion is wrong, because, as Marx sets out, here, capital can utilise existing fixed capital as the basis of a considerable extension of output. What does occur is the introduction of lumpiness in fixed capital investment, so that existing levels suffice for a given period, followed by large clumps of investment when the existing fixed capital is no longer adequate, particularly apparent in infrastructure in roads, rails, power grids, telecommunications and so on.
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