Review of Predictions For 2019 - Prediction 4 - Electric Cars Become Cheaper Than Petrol/Diesel Cars

Over a four year period, electric cars are now cheaper than petrol/diesel or hybrid cars. That is because, although electric cars are slightly more expensive to buy, the running costs are so much lower. The cost per mile is a fraction of that of petrol/diesel, and maintenance costs are also lower. In my prediction, I was, however, also expecting that the actual cost of buying electric would now be cheaper. That hasn't happened, but the price of electric continues to fall rapidly relative to petrol/diesel. Every major manufacturer is now expanding their range of electric vehicles. 

In addition, first time buyers of electric vehicles get a discount of £3,500 off the cost. Other incentives include 75% of the cost of installing a charging point at home, and the ability to obtain low tariff rates for overnight electricity, which is the main time cars would be charged at home. In the meantime, free charging points are being erected in many locations. Employers are being encouraged to provide them for their workers, supermarkets have a clear incentive to provide them to entice customers into their stores. 

The rate of development of technology, and the rapid pace of adoption of electric vehicles means that as production levels are ramped up, the price of electric vehicles will soon itself be lower than that for petrol/diesel. The fact that electric vehicles are cheaper over a four year period itself creates a powerful incentive for people to switch, which, as demand rises, will again stimulate additional production. 

Governments proposed ending production of petrol/diesel-engine cars by 2040, but, in fact, manufacturers will have stopped production long before then. Already some have said they will not produce any new petrol/diesel models from around 2025, leaving them producing only existing ranges as petrol/diesel. But, few people will want to buy a new car that is based on a model that is several years old. So, its likely that, soon after 2025, main car makers will phase out petrol/diesel production altogether. That will be a great contributor to the reduction in greenhouse gas emissions, particularly in China, where many of these new electric cars will will be sold. 

This rise of the electric car will soon after be followed by the large-scale roll-out of self-driving cars, as technology, and, in particular, AI, develops rapidly alongside 5G, and then 6G mobile internet networks. That opens the potential for car ownership to become a thing of the past, as it becomes yet another area in which service industry dominates. Car travel will become a service in the same way that today Netflix and Amazon subscriptions have become the way that people view TV and films, rather than having to buy a DVD player, and rent or buy DVD's. It will simply be a matter of calling up a self-driving car on a smart phone, in the same way as today you might call up an Uber. You tell it where to go, and leave it, when you have done with it. Incidentally, the cheapness and convenience of this form of transport will also spell the death-knell for local bus services, and light rapid transit and tram services.

Back To Review of Prediction 3

Forward To Review of Prediction 5

Paul Mason's Postcapitalism – A Detailed Critique - Introduction

As Paul kindly listed me, in the acknowledgements for his book, alongside luminaries such as Steve Keen, for having influenced his thinking, I feel that it has been somewhat remiss of me only to have responded, so far, in scattered posts. But, given the importance and scope of the topics covered in the book, which have also employed my mind over the years, and given the extent to which my own views have obviously influenced some of the contents of the book, I felt, indeed as I feel with all such tasks, that if it's worth doing at all, it's worth doing well. Pressure of other work in the last couple of years, and some health problems during that period have also limited my ability to respond in the way I felt was required. I hope to remedy that deficiency in a series of posts, now reviewing the book, and the important subjects it contains. 

I have been interested with many of these issues for the last ten years. Not long after I began writing my blog, Paul contacted me, and noted our shared interest in political economy, and Northern Soul. Back in 2008, after I had predicted the financial crisis was about to erupt, just a few weeks before it did, I conversed with Paul by e-mail, on a range of these topics from the crisis, the long wave, the role of technology and of co-operatives. 

In responding to the reviews and comments of others on the book, I have noted that whenever someone like Paul brings forward some new idea that is seen as challenging some established doctrine of left-wing thought, there is a tendency to treat the work as heresy, and the author as a heretic or traitor. It is an indication of the extent to which what passes for Marxism has, in fact, degenerated into a series of ossified sects, each jealously protecting their own sacred texts and dogmas, which they repeat as mantras, and carry before them as talismen. I have no intention of following that path, although, as will be seen, I have a lot of disagreement with Paul's arguments and conclusions. Marxism is a science, and science depends upon new thinking, and new ideas constantly challenging the existing theories. Of course, those that challenge the existing theories themselves have a responsibility to meticulously make their case. It's in that spirit that this critique if undertaken. 

In order to deal with the importance and scope of the book, whilst keeping to my usual practice of keeping individual posts to readable lengths, I will deal with each chapter separately, and in parts where required, before setting out an overall critique and additional comments by way of a conclusion.

Forward To Chapter 1 - Neoliberalism is Broken

Apple iPhone X Launch – Yawn

Its ten years since Apple launched the iPhone, and to celebrate, on Tuesday it launched the latest iteration, the iPhone X. The phone has a number of new features, including facial recognition, which embarrassingly, for Tim Cook, failed to work at the public launch. But, this latest iteration of the phone is a bit like Ford launching models of the Model T in colours other than black, or the makers of Persil, adding a few different scents, and a newly designed box, in order to try to sell the same soap powder to additional customers, or to get existing customers to pay more.

When mobile phones were introduced, back in the 1980's, they represented a new technological commodity. Even, the early iterations of mobile phones that took them from being limited, brick-like products to effective, convenient commodities represented a real development. Then, the further developments, making them ever smaller – and so for many of us unusable – were merely window dressing, changes for the sake of changes, as a means of trying to get existing owners of phones to buy the latest model, in the same way that clothes producers convinced customers they had to throw away perfectly good clothes, simply to have this season's fashions. That changed with the introduction of the smart phone.

The smart phone not only replaced the mobile phone, and all those consumable products that went with it, such as the calculator, but it also did away with the need for a camera, it provided access to the Internet, and so on. It was a real technological change. But, for the last ten years, we have been back in the same rut, as happened with the mobile phone. There have been this or that different apps developed for the smart phone, that really just utilise its existing technology, there has been the ability to use it to replace satellite navigation devices, and so on, but, in reality, these all amount to the equivalent of car producers, including a radio, or a cassette player, or a CD player in the car, as opposed to the car producers going from a petrol driven car, to an electric car.

Yes, Apple introduced the iWatch, but it illustrated the problem. What was the point of it? It was way too small and fiddly to be used effectively, for anything actually useful, and in any case, to use it, you still had to be carrying an iPhone! If Apple, or some other technology company wanted to introduce something really novel, here is an idea. How about a graphene flexible armband, that provides all of the functionality of an iPhone, and also monitors your biometrics, and the security of which is guaranteed by it being tied to your unique pattern of veins, and capillaries, in your arm.

After all, its one thing to lose a burn phone bought for a fiver from Tesco, its quite another if you lose, or have stolen an iPhone X, costing nearly $1,000. Of course, the latter point is largely tied to the fact that Apple is a bit like the story of the Emperor's new clothes. What Apple should really be congratulated on is its ability to use hype, and effective marketing and advertising to convince so many millions of people that there was something unique and special about its products, going back to the Apple Mac, which justifies them charging such outlandish prices for those products.

A recent item on CNBC discussed the potential that with the cost of these iPhones now being so high, it was possible that a similar thing as seen with new cars would be introduced. That is instead of actually buying the car/iPhone, consumer are encouraged instead to lease it, and thereby to be tied in to upgrading every two or three years. The technologies developed over the last thirty years, and the development of new materials such as graphene, means that there is still considerable scope for introducing new technologically based commodities, in the next period of economic expansion, but that will require innovation in developing those new products, not simply offering up reheated versions of what already exists. In the meantime, the largest area of expansion is probably not in the realm of actual products, but of new services, of which the development of new apps is simply one part.

The development of Babylon, as a means of people being able to get almost immediate appointments to see a GP, illustrates the way the concepts of flexible specialisation, and neo-fordism, introduced in production from the 1980's onwards, are being applied now to service provision. The cost of DNA sequencing is becoming so cheap, probably falling to around £100 within the next five years, that everyone will have their individual gene sequenced, so as to identify potential health risks, and to provide flexible and specialised treatments for their particular needs, as well as monitoring their biometric, via implants other equipment.

The future holds great prospects.

Marx and Machines - Part 7 of 7

Paul Mason in his book, argues that capital has invested in nail bars rather than industries based on gene sequencing technology. I have some sympathy with that argument. I have made the point many times that capital in the US, which is by far the world's leading technological power, has failed to direct capital away from low profit areas to these high profit areas of production, and this is one reason its growth has been less than spectacular after the new long wave boom began in 1999.

However, I believe the reason for that is not because we have entered some new paradigm of post-capitalism. The reason is rather to be found in the more mundane realm of politics and material interest.

It is that, after the long wave boom ended, in the mid 1970's, big industrial capital, and the social democracy that rests on it, became weaker and in proportion, conservatism became stronger. That conservatism is based on the financial and landed oligarchy, as well as the remnants of small-scale private capital. Conservative regimes, such as that of Reagan in the US and Thatcher in Britain, pursued policies that furthered the material interests of these elements.

An economic model was developed which was based upon low wages and high levels of private debt. Low wages facilitated an expansion of small scale capitalists such as the nail bars and so on, and this went along with a low productivity economy. A lot of larger scale industry migrated to Asia.  I predicted all of this development back in the early 1980's, as the process began to unfold - See: The linked series of documents on Imperialism and The New International Division of Labour written in 1983.

A low wage, low productivity economy subsisted on increasing welfare payments, which subsidised low paying employers, by sucking increasing amounts of tax out of better paid workers, and thereby undermined the profitability of the more efficient segments of capital by increasing its costs. It acted directly to misallocate capital away from the more efficient sectors towards the inefficient subsidised sectors. It is the same kind of clientelism by conservative regimes, in the interests of their base, of which Greek governments have been accused.

At the same time, the interests of the other conservative clients, the financial and landed oligarchy, was served by a massive rise in private debt, as the other means of maintaining living standards. On the one hand, it has set the stage for the second great expropriation of the peasantry,  as occurred with the Enclosure Acts.  In parts of Europe, its already happened on a small scale with the bank bail-ins. Huge numbers of workers and members of the middle class, in the US, UK and Western Europe were encouraged to buy property at massively inflated prices, and to go into unheard of levels of debt to do so. Those who had already bought property, in the 1950's - 70's, were encouraged to buy more expensive property, or to release equity in their property, or to use it as collateral so that their children could buy property at massively inflated prices, taking on even more debt to add to their student debt, credit card debt and so on.

Yet others were encouraged to speculate in property as buy-to-let landlords, as a means of providing for their pensions. That was necessary because they had previously been encouraged to establish pension funds by buying into massively inflated equity and bond markets, which now offer near zero yields, because the fictitious capital has been pushed up to astronomical prices.

All of this turned the worthless bits of paper circulating in financial markets into items more highly priced than diamonds, and made the financial institutions into the most powerful businesses in the world, whilst the financial and landed oligarchy saw their fictitious wealth soar to unprecedented heights.

As these speculative gains seemed unstoppable, the owners of this fictitious wealth got their representatives on Boards of Directors to ignore all of the vast potential for increasing productive wealth and instead to use available profits for ever more speculation, for the boosting of share prices by share buybacks and so on.

That is why the investment has not gone into these new technology industries in the way it should have done, other than where individual private productive capitalists have directed it, such as with Elon Musk with Tesla and Spacex, or Craig Ventnor with gene sequencing.

When this process hit a barrier in 2008, that same financial and landed oligarchy used its conservative regimes to save it by bailing out the banks, and to pay for it via austerity imposed on the masses. And now, when the value of that fictitious capital is destroyed, those masses will again suffer a huge expropriation. The money saved in the ISA's, 401k's and so on, will become worthless. Their property will drop 80-90% in price – even in Kensington, house prices are reported to have fallen nearly £200,000 last month alone! - whilst they will be left with huge mortgage debts to repay.

In Britain, the Tories are already introducing additional taxes on property, such as the removal of tax relief on buy-to-let mortgages, whilst Carney has given clear warning that interest rates are starting their long rise. One very successful forecaster is predicting that house prices will fall for 18 years, dropping in real terms to their 1955 level.

It is these factors that have acted to limit investment in these areas of technology not the beginning of some new paradigm of post-capitalism. As soon as interest rates rise, the bond bubble bursts, property prices collapse, the stage will be set for a resurgence of productive capital, and large scale investment in these areas. The beginning of it can already be seen if you look.

Not only are there ventures conducted by individual productive capitalists like Musk, Branson etc. in terms of space and other technology, but there is a widespread of growing commodities in the very areas that Paul mentions, such as gene sequencing, and bio-technology solutions to illnesses that even just five years ago seemed incurable.

They may be the basis for the current long wave boom extending for longer than normal, and thereby compensating for the lost ground caused by the influence of interest bearing capital over the previous period.

Back To Part 6

Marx and Machines - Part 6 of 7

To return to the point made in the beginning, in relation to Paul Mason's new book, it seems to me to make the same mistake that Marx himself made, but for which he could be forgiven considering the time he was writing. Marx, in Theories of Surplus Value I, in discussing productive and unproductive labour, examines the views of Charles Ganilh and others.

Ganilh believed that the larger the number of unproductive labourers in society the more civilised it was. For that reason, he sought to have capitalists spend less on accumulation and more on supporting such unproductive labour. He failed to recognise that to support more unproductive labour, its necessary to increase the productivity of the productive labour, and this requires additional accumulation.

Ricardo also wanted to minimise the number of productive labourers by increasing productivity, because he saw the position of labourer as an undesirable one.

Marx goes on to discuss the release of productive labourers, who become then employed in service production. Marx has arrived at a conclusion that all commodity production is undertaken by productive labour, i.e. wage labour that exchanges with capital, whereas service production is undertaken by unproductive labour, which exchanges with revenue.

There are exceptions he says, where services such as education are provided in capitalist education factories, with teachers employed as wage labour by capital, but these represent only a small part of social production. But, this has long since ceased being the case. Education itself has expanded massively. Large numbers of teachers are employed as wage labourers, in huge education factories, run by state capital. The same is true of healthcare, and a range of other welfare services.

Today, service industries account for the vast majority, 80%, of output value, and this consists of commodities in goods and services provided by wage labourers employed by capital. Increasing components of this service industry production consists of things which, in Marx’s day, would have been, and some of which he describes as being, produced by individual workers such as entertainment, which was a minor activity then, but is a huge industry now.

Even some of those most personal of personal services, which were provided on an individual basis in Marx’s day, have today been brought within the remit of capitalist production, as a multi-billion dollar sex industry attests.

In fact, therefore, just as rising productivity in agriculture first made surplus value possible and then made the expansion of industry possible, so now that same expansion of productivity, based on ever more powerful, ever smarter machines, has reduced industrial production itself to a minor role in social production, and facilitated an expansion of that service production.  This is a point I made more than 30 years ago, predicting this development.

Formerly, the task of industrial production fell to the artisan, and then, as industrial production expanded, it was undertaken by the wage worker, whilst the services required were provided by individual unproductive labours. Today, the services are produced by wage workers too.

Back To Part 5

Part 7 Will Appear Tomorrow

Marx and Machines - Part 5 of 7

In Theories of Surplus Value, Part I, Marx sets out the following argument in relation to the way a machine can replace labour, and cause unemployment.

“If a labourer without machinery needs 10 hours to produce his own means of subsistence, and if with machinery he only needs 6, then (with 12 hours’ labour) in the first case he works 10 for himself and 2 for the capitalist, and the capitalist gets one-sixth of the total product of the 12 hours. In the first case 10 labourers will produce a product for 10 labourers (equal to 100 hours) and 20 [hours] for the capitalist. Of the value of 120, the capitalist gets one-sixth, or 20. In the second case, 5 labourers will produce a product for 5 Labourers (equal to 30 hours), and for the capitalist 30 hours. Of the 60 hours the capitalist now gets 30, that is, one half—3 times as much as before, The total surplus-value too would have risen, namely from 20 to 30, by 1/3. When I appropriate one-half of 60 days, this is one-third more than when I appropriate one-sixth of 120 days.”

(Theories of Surplus Value, Chapter 4)

There are a number of minor errors here, that are not significant, such as the rise of surplus value from 20 to 30 is an increase of a half not a third. There are similar minor mistakes throughout this section, but they are not significant to the argument.

Marx assumes that 5 workers will be made redundant, and asks what happens to them. If we assume that prior to the machine the volume of output was equal to 1200 units, 1000 going to wages and 200 to surplus value, then now output would rise by two-thirds as a result of the machine, but fall by half due to the halving of the workforce, so 2000/2 = 1000 units.

Previously, 10 workers required 1000 units for their reproduction, so now 5 workers will require 500 units for their reproduction, leaving 500 units as surplus value.

This conforms with Marx’s model, where now 5 workers work for 12 hours, producing 60 hours of value.

“Of the 60 hours the capitalist now gets 30, that is, one half—3 times as much as before.”

So, now 5 workers produce enough to reproduce their labour-power, as well as producing 30 hours of surplus value (500 units), whereas previously 10 workers produced only 20 hours of surplus value (200 units). What is to become of the other five workers?

Marx says,

“It will be said that capital has also been released, namely, that which paid the five dismissed workers, who each received 10 hours (for which they worked 12), that is, 50 hours in all, which could previously have paid the wages of five labourers and which [now] that wages have fallen to 6 hours can pay for 50/6 = 8 1/2 days’ labour. Therefore now the capital of 50 [hours’] labour that has been released can employ more labourers than have been dismissed.

(Theories of Surplus Value I, p 217)

But, Marx's analysis is not really satisfactory. First of all, the released variable capital is not 50 hours as Marx states, but 70 hours. Previously, 100 hours of value was required to reproduce the labour-power of the 10 workers, and now only 30 hours of value is required to reproduce the labour-power of the five workers. That is a release of 70 hours of variable capital, available to employ the five redundant workers.

But, as Marx correctly states, this 70 hours of value is not entirely released. In order for the rise in productivity to occur, a machine had to be introduced, and the cost of the machine requires capital, which is then to be deducted.

However, the machine likewise requires labour for its production, and this is additional labour. In itself this would account for additional employment, theoretically providing work for some or all of the five released workers. But, Marx is correct in the other points he raises in this connection. If we take the value of the machine, then we know from the analysis Marx, and particularly Engels, gave in Capital III, it will only be introduced if its value is less than the paid labour it replaces. The value of the wages of the five workers was 50 hours, so the value of the machine must be no more than 50 hours.

That a portion of this value is comprised of the value of the constant capital consumed in its production does not change matters, because this material etc. is itself the product of additional production, and new labour. However, Marx is correct that not all of its value is accounted for by wages. On the basis of the current rate of surplus value, set out in the example, we would have to conclude that half of the value reproduces labour, and half goes to surplus value.

If the machine has a value of 50 hours, this may divide into 25 hours to reproduce the labour used in its production, and in the constant capital consumed in its production, and 25 hours of surplus value. If, with the current value of labour-power it requires 30 hours labour to reproduce the labour of 5 workers, this 25 hours of labour-power embodied in the machine is equal to 4.16 workers.

Where Marx is right, in this respect, however, is that there is no reason why these 4.16 workers required for machine and associated production, should be or could be drawn from the five workers released from other production by the machine.

“The number of machine-building labourers [who built the machine is] smaller than the number of labourers discharged; nor are they the same individuals as those discharged.”

(Theories of Surplus Value I, p 217)

But, Marx does not take into account the further consequences resulting from this change in production relations. Firstly, as demonstrated above, the release of capital is actually equal to 70 hours of labour, not 50 hours as Marx stated. So, if the machine has a value of 50 hours, and 25 hours is accounted for by labour-power, this provides employment for 4.16 workers. But, out of the 70 hours of released capital, 20 hours remain. At the current value of labour-power, 20 hours is sufficient to employ 3.33 workers.

That means the released capital is sufficient to employ 7.5 workers compared to the 5 that were released. But, that is not all. Previously, the capitalist appropriated 20 hours of surplus value, and now appropriates 30. Previously, the 20 hours of surplus value would have been enough to employ 2 additional workers. Now 30 hours of surplus value is enough to employ five additional workers.

In addition to that, the capitalists producing machinery and associated materials now appropriate 25 hours of surplus value, where previously they appropriated none. As a result this 25 hours of surplus value is enough to employ an additional 4.16 workers. In total, therefore, the net effect of the rise in productivity from the introduction of the machine is as follows.

Five jobs are lost initially, replaced by the machine. To produce the machine and component materials, (value 50 hours) 4.16 workers are employed. With the remaining 20 hours of released wages, a further 3.33 workers can be employed. The surplus value previously of 20 hours would have employed 2 workers, and the 30 hours of surplus value now employs 5 workers, a net increase of 3. The surplus value in the machine producing industry and associated industries is enough to employ an additional 4.16 workers.

So, 5 jobs are lost, but a net 14.65 jobs can be created from the released capital and additional surplus value, resulting from the rise in productivity. That gives a potential rise in employment of 9.65 workers. That is why the vast rise in productivity since Marx's time has not resulted in ever rising levels of mass unemployment, but has resulted in ever expanding capital accumulation and rising levels of employment.

In fact, for the reasons Marx describes, that this same rise in productivity reduces the value of fixed and circulating constant capital, the actual expansion of capital and production is even greater than suggested here because constant capital is also released, and the surplus value, now accumulates a greater mass of it. However, this process of accumulation is far from smooth, or crisis free, precisely for the reasons described above.

“The shifting of labour and capital which increased productivity in a particular branch of industry brings about by means of machinery, etc., is always only prospective. That is to say, the increase, the new number of labourers entering industry, is distributed in a different way; perhaps the children of those who have been thrown out, but not these themselves. They themselves vegetate for a long time in their old trade, which they carry on under the most unfavourable conditions, inasmuch as their necessary labour-time is greater than the socially necessary labour-time; they become paupers, or find employment in branches of industry where a lower grade of labour is employed.”

(Theories of Surplus Value I, p 217-8) 

But, as in Capital I, Marx then goes on to set out how the expansion of capital leads to the expansion of employment, the theoretical basis for which I have described above. Today, that has meant that for the first time in history, the working class is the largest class on the planet, and that has come with ever rising living standards, levels of education, health and well-being.

The criticism of capitalism is not that it creates permanent unemployment or poverty, but that the way it creates additional employment and wealth is chaotic and crisis ridden, so that it unnecessarily goes through periods where wealth is destroyed and large numbers suffer avoidable misery.

Back To Part 4

Part 6 Will Appear Tomorrow

Marx and Machines - Part 4 of 7

In describing the effects of machines in relation to unemployment, the dichotomous attitude of Marx once more manifests itself. He wants to oppose the bourgeois apologists who can see no downside to the introduction of machines, for workers, and who argued, for example, that the workers “freed” from production, by the introduction of machines, would simply be employed by the capital that was released by this process, for example, in producing the machines themselves.

Ricardo, who had originally held that position, was later to recognise the devastating role that machines could have on workers. In his presentation of this case, however, Marx makes a number of errors, particularly in Theories of Surplus Value, Part 1, that are hard to explain. Moreover, both in Capital I, and in Theories of Surplus Value, Part I, having made this case, Marx goes on immediately to set out the extent to which, rather than contracting, employment expands significantly.

As I set out in my new book Marx, in Chapter 15, 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.”

As he makes clear here, there are two aspects to the role of the machine. On the one hand, a machine may be introduced which actually replaces existing workers, who are thereby made redundant. On the other hand, a machine may be introduced, which does the work that x number of workers would have previously been required to undertake, but this does not at all mean that this number of workers are thereby made redundant, if they were not so employed in the first place.

Suppose, for example, it would take 500 workers, using hand tools and horses, to excavate a canal. The cost of employing these workers, for this task, might make it too costly to undertake. However, if a steam powered excavator is introduced, it may be able to undertake this work at a fraction of the cost. It then becomes possible to dig the canal, and in addition to the excavator driver, workers are now employed in other activities such as building locks, canal barges, and so on, who otherwise would not have been employed.

Although, therefore, the machine theoretically replaced labour, in practice, it led to more workers being employed. Marx gives a similar set of examples in Capital I, of the range of jobs that were created in the 19th century, as capital expanded rapidly, for example, in building railways, roads, canals, ports and so on. And, even where capital replaces existing labour, the additional profits it creates by higher productivity, enable such an expansion of capital that employment can increase above what it was previously.

“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, p 424)

Back To Part 3

Part 5 Will Appear Tomorrow

Marx and Machines - Part 1 of 7

Marx has a dichotomous attitude to machines. It can be seen in his attitude to Luddism.

“They direct their attacks not against the bourgeois conditions of production, but against the instruments of production themselves; they destroy imported wares that compete with their labour, they smash to pieces machinery, they set factories ablaze, they seek to restore by force the vanished status of the workman of the Middle Ages.”

(The Communist Manifesto)

He makes the same point in Capital Volume I,

“It took both time and experience before the workpeople learnt to distinguish between machinery and its employment by capital, and to direct their attacks, not against the material instruments of production, but against the mode in which they are used.” 

(Chapter 15, p 404) 

Central to Marx's theory of historical materialism is the idea that it is the productive forces which determine productive relations, and those productive relations that determine social relations.

“Social relations are closely bound up with productive forces. In acquiring new productive forces men change their mode of production; and in changing their mode of production, in changing the way of earning their living, they change all their social relations. The hand-mill gives you society with the feudal lord; the steam-mill, society with the industrial capitalist.”

(The Poverty of Philosophy, Chapter 2) 

But, this dichotomy exists throughout Marx's approach to machines. Machines dehumanise workers, and yet provide the basis to become truly human; machines cause unemployment, but promote employment; machines lead to lower wages, but higher living standards; machines increase relative surplus value, but destroy profits; machines increase wealth but reduce value. In fact, this last point is essential to understanding Marx's theory of overproduction of capital.

The idea that machines are both dehumanising, and yet create the potential, for the first-time, to become truly human, is the subject of Paul Mason's new book. In it, he proposes the idea that we are already entering an era that he describes as “post-capitalism”. Its an unfortunate label, because it is the one chosen by Ralf Dahrendorf and others at the LSE, under Hayek, to describe the convergence of systems in Eastern Europe, and under monopoly capitalism, whereby the market and profit motive was being replaced by planning, and where the role of the capitalist was being replaced by a new class, or bureaucratic-collectivist caste of professional managers, technocrats and administrators.

As with most such theories, it mistook a range of superficial appearances and similarities for genuine identities, and thereby failed to analyse the underlying realities, and fundamental differences.

Paul Mason's basic thesis is rather different. Instead of a theory based on the idea that technological change had created this new bureaucratic class, which extends its function across industry and state, and thereby dominates society, it is the opposite. It is that technology has brought about a new extension of democracy, and atomisation of control. In place of the old heavy industries, we have a proliferation of new, nimble, small technologically based industries, even down to the level of the individual who can now produce high value commodities, in the form of intellectual property, directly from a computer in their bedroom.

Moreover, the atomisation and dispersion of intellectual property breaks apart old power structures. The most visible expression of that is the Internet and social media. Both the left, still operating with outdated notions based upon the industrial working-class, and the need to socialise production and exchange, via the medium of the state, and capital itself, has failed to recognise this change.

So, for example, capital, which could be investing in a range of new technologically driven industries, such as those based on gene sequencing, instead continues to seek out areas of profitable investment based on the exploitation of low paid labour.

“As a result, large parts of the business class have become neo-luddites. Faced with the possibility of creating gene-sequencing labs, they instead start coffee shops, nail bars and contract cleaning firms: the banking system, the planning system and late neoliberal culture reward above all the creator of low-value, long-hours jobs.”

(Guardian)

About fifteen years ago, I remember having a discussion with my old friend, John Ellis, along similar lines. If I remember correctly, we were out delivering Labour Party leaflets, at the time, which was a rather non-technological activity to be engaged in whilst holding this discussion. The question I was posing was not whether these changes were creating a post-capitalist society, but rather whether they were creating a return to feudalism on a higher technological basis? I wrote a blog post about it, some time after entitled – Technological Feudalism.

In other words, feudalism was based on small scale, scattered, individually owned means of production. The individual peasant producers produced means of consumption, directly for their own needs, only exchanging a part of that product with other small producers, in order to obtain commodities they could not effectively produce for themselves.

We tend to think of the rents these peasants paid to the landlords, as being in exchange for use of the land, but, as Marx describes in Capital III, this basis of rent only arises with capitalist production, as land itself becomes a commodity, which is bought and sold. In fact, rent under feudalism is purely a form of tribute, paid to landlords. It originates in individual acts of tribute paid to clan leaders, and so on, before becoming ritualised. The basis of the rent is the surplus product of the peasant, over and above what was required for their own reproduction, and so as Marx says, is the form taken by surplus value under feudalism. The rent is paid to the landlord solely on the basis of entitlement to it, due to their social rank.

The central part of my thesis, therefore, as with Paul's concept, was that technology had created a class of producers who were no longer wage workers, but individual commodity producers, of the type of a peasant producer or artisan. They came in a range of forms. Just as the peasant producers ranged from serfs and vassals, to the yeoman farmer, so, some were homeworkers, some involved in actual material production, but a large number of others were employed in tele-marketing, or other services, such as sex chatlines; yet others were high value producers, for example, there has been a proliferation of websites that match up self-employed programmers and web designers, and so on, to those requiring such services.

In addition, besides the vast array of people who now provide free entertainment, information, education and so on, via blogs such as this, there has arisen the potential for performers and artists, of all kinds, to bypass the old enterprises that hired their labour-power, and to simply hawk their wares directly via the Internet, from their own bedroom, garage, or home studio.

One of the reasons this becomes possible is not just that technological developments make it physically achievable, and that the cost of the means of production itself becomes almost de minimus, but that many elements of the producer's consumption have become almost de minimus too. That is also a consequence of technology.

Machines, and other aspects of science and technology has raised productivity to such levels that in many areas of consumption, there is actual abundance. The price of food has fallen so low that the average UK family throws away a third of the food it buys, and obesity is rampant. Milk production globally has risen so much that a litre of milk is now cheaper than a litre of water.

The peasant producer spent most of their time producing solely to meet their own consumption needs, and only traded the surplus over that product. The landlord secured the surplus product over and above what was required for the peasant's reproduction. Today, the landlords, in this scenario are the owners of the cyber space in which this activity takes place.

Part 2 will appear on Saturday