READ AND DISCUSS:

Wage Labour and Capital (Marx, 1847) ⁴⁶

“If as a whole, the productive capital of bourgeois society grows, there takes place a more many-sided accumulation of labour. The individual capitals increase in number and in magnitude. The multiplications of individual capitals increase the competition among capitalists. …

The one capitalist can drive the other from the field and carry off his capital only by selling more cheaply. In order to sell more cheaply without ruining himself, he must produce more cheaply – i.e., increase the productive forces of labour as much as possible.

But the productive force of labour is increased above all by a greater division of labour and by a more general introduction and constant improvement of machinery. The larger the army of workers among whom the labour is subdivided, the more gigantic the scale upon which machinery is introduced, the more in proportion does the cost of production decrease, the more fruitful is the labour. And so there arises among the capitalists a universal rivalry for the increase of the division of labour and of machinery and for their exploitation upon the greatest possible scale.

If, now, by a greater division of labour, by the application and improvement of new machines, by a more advantageous exploitation of the forces of nature on a larger scale, a capitalist has found the means of producing with the same amount of labour … a larger amount of products of commodities than his competitors – if, for instance, he can produce a whole yard of linen in the same labour-time in which his competitors weave half-a-yard – how will this capitalist act?

He could keep on selling half-a-yard of linen at old market price; but this would not have the effect of driving his opponents from the field and enlarging his own market. But his need of a market has increased in the same measure in which his productive power has extended. The more powerful and costly means of production that he has called into existence enable him, it is true, to sell his wares more cheaply, but they compel him at the same time to sell more wares, to get control of a very much greater market for his commodities; consequently, this capitalist will sell his half-yard of linen more cheaply than his competitors.

But the capitalist will not sell the whole yard so cheaply as his competitors sell the half-yard, although the production of the whole yard costs him no more than does that of the half-yard to the others. Otherwise, he would make no extra profit and would get back in exchange only the cost of production. He might obtain a greater income from having set in motion a larger capital, but not from having made a greater profit on his capital than the others. Moreover, he attains the object he is aiming at if he prices his goods only a small percentage lower than his competitors. He drives them off the field, he wrests from them at least part of their market, by underselling them.  …

But the privilege of our capitalist is not of long duration. Other competing capitalists introduce the same machines, the same division of labour, and introduce them upon the same or even upon a greater scale. And finally, this introduction becomes so universal that the price of the linen is lowered not only below its old, but even below its new cost of production.”

South Africa’s Impending Socialist Revolution (Inqaba ya Basebenzi, 1982) ⁴⁷

“The capitalist system sets in motion a constant struggle between the capitalists to cheapen their respective goods, by constantly increasing the productivity of labour. By reducing the quantity of human labour spent on the production of each product, they lower its value and are able to bring a cheaper commodity to market. The essential means for achieving this is to continually advance and expand the machinery used in production.

Thus, under the domination of the capitalist class, modern large-scale industry has arisen to replace the earlier manual crafts and manufactures. First steam engines were developed in the place of horsepower, and then electricity in the place of steam. The power of the sun and the atom have been tapped. On the basis of assembly lines, railway and air transport, the telegraph, telephone, radio, television and telex, of computers and automation, production has been multiplied and multiplied again.

In repeatedly revolutionising the means of production, the capitalist class has performed an immensely progressive historical role. But reality always has more than one side. On a capitalist basis, the logic of mechanisation is not to ease the burden of labour on the working people, but solely to secure and advance the competitive position of the owners. Instead of an all-round lessening of work, together with improvements in living standards for everyone, its sole purpose is to displace labour in order to reduce costs. Workers squeezed out of one job by the introduction of machinery will find alternative employment if the economy is expanding fast enough to absorb them. But if not, capitalism throws them on the stones regardless.

So it is that mechanisation, a force for progress, becomes on the basis of capitalism a threat hanging ever the working class. But the struggle between labour and capital sharpens even more on account of the constant striving of the bosses to depress the real value of the wages paid to labour.

The tendency of capitalism to constantly revolutionise the means of production and massively expand the output of goods, ensured its enormous superiority over the earlier modes of production which it replaced. Expanding production, however, requires an expanding market. But, as already outlined, the necessary drive of the capitalists to replace human labour with, machinery and to depress the real value of wages, gives rise to a tendency for the purchasing power of the mass of society to contract, or not to expand as fast as the expansion of production.

Thus, the capitalist class is caught in a contradiction - between the expanding production of the goods and services which constitute real wealth in society, and the narrowing basis of relative consumption under the capitalist system. This contradiction results in repeated cycles of economic and social crisis.

As investment rises, the proportion of investment spent on the employment of workers falls. Since living labour is the sole source of value and hence of profit, the underlying tendency of capitalist production is therefore for the rate of profit - the rate of return on the total investment of the capitalists - to fall.

Thus, out of the unplanned rush of the capitalist class to invest in new techniques and expand production, there results the tendency towards ‘overproduction’ and a falling rate of profit. These are described as tendencies and not as absolute laws because various economic conditions, especially at the beginning of a new cycle of expansion, may temporarily offset their operation. But whenever - as inevitably it must - the rate of profit begins to fall, it inflames all the contradictions of the system.”

AI automation – What impact will it have on workers and the economy? (CWI, 2023) ⁴⁸

“This trend, of increased automation in production, cannot be taken to its conclusion by capitalism. Capitalists only invest in implementing new technology when they can be sure of realising a profit. This means that new technology will be implemented if the capitalists think society is stable enough to justify investing large amounts of money now to realise a profit over a number of decades, and if there aren’t other more profitable opportunities for them to use their capital in the short term.

The production of semiconductors, a vital component in the chips in all modern electronics, requires $15-20 billion of investment for a new factory. Capitalists have to be persuaded to invest in new infrastructure with government subsidies, even though profits for these are likely to be guaranteed over their years-long lifespan.

The struggle over the impact of new technology is class struggle, with workers fighting for jobs and wages on the one side and the bosses who own the factories, the patents and the infrastructure on the other. Under capitalism, technological advances will be used in ways to maximise profit.

A democratically planned socialist society, based on public ownership of big business and the banks, would be able to use technology in a different way. Instead of hunting for profit, production could be planned with other priorities in mind, such as reducing the necessary time for people to have to work, alongside protecting the environment and the wellbeing of workers.

In a number of fields, the potential for technology to be used for the good of us all is there. The advances in electronics and computing which have fuelled the gig economy contain within them the potential to be used to improve the lives of workers across the world.

A socialist society, in which the resources and knowledge of society are owned and directed democratically by workers themselves, would mean technology is freed from the narrow interests of the capitalists. Technology which under capitalism condemns workers to lower wages and unemployment could be utilised for the good of us all.”

1. Reading the extract from Marx’s ‘Wage, Labour and Capital’,

(a) How does Marx explain why competition between capitalists drives them to reinvest their profits into “constant improvement of machinery”?

(b) Why, for a time, is the capitalist then able to sell their goods at a lower price than their rivals?

(c) Why, however, is that temporary competitive advantage then eroded?

2. Reading the explanation of ‘Inqaba ya Basebenzi’,

(a) In what way has the competition between capitalists played a “progressive historical role”?

(b) But, as it says, “reality always has more than one side”. What is the effect on the working class?

(c) Why, however, does it also result in a “tendency towards ‘overproduction’ and a falling rate of profit”?

3. Reading the article on AI automation,

(a) Why do capitalist corporations increasingly demand state subsidies to assist them with the investment required to introduce new technology?

(b) Explain how “the struggle over the impact of new technology is class struggle”.

(c) How would new technology be utilised in a socialist society in a way that benefits society, instead of being seen as a threat to workers’ jobs and living standards, as it can be under capitalism?