Part One
Karl Marx has always claimed that the introduction of machinery within the capitalist labor-process was orchestrated to cheapen commodities and in the process also to cheapen labor-power. As he states, in Capital (Volume One), “the use of machinery [is] for the exclusive purpose of cheapening the product”,1 that is, the commodity, and labor-power being a commodity, means in turn that labor-power is as well cheapened in the process. Moreover, according to Marx, besides lowering wages via the cheapening of workers and labor-power, the introduction of machinery is utilized to eliminate workers and their labor-power outright from the sum of capitalist production, namely, through “the introduction of new machinery…not only are the workers directly turned out by…machines set free, but so are their future replacements in the rising generation”2 as well excluded. For Marx, “a tool is a simple machine and a machine is a complex tool”3 in the sense that a machine “is a mechanism that, after being set in motion, performs with its tools the same operations as the worker formerly did with similar tools”.4 As a result, Marx states, “machinery and labor are in constant competition”5, locked in perpetual struggle for supremacy in the sense that “when it becomes the job of the machine to handle [the worker’s] tool, the use-value of the worker’s labor-power vanishes, and with it its exchange-value”.5 And this continues as long as the capital/labor relation remains the organizing principle for society in general, ultimately giving capital the upper-hand within the capital/labor relation over labor.
Moreover, automation, or full automation, is the zenith of the capitalist mode of production, due to the fact that “machinery…is the material foundation of the capitalist mode of production”6, and according to Marx, automation is “an organized system of machines to which motion is communicated by the transmitting mechanism from an automatic centre, [likewise, this form of fully mechanical organization] is the most developed form of production by machinery”.7 As a result, for Marx, the introduction of machines into the capitalist labor-process “is the starting point of the industrial revolution”.8 And the large-scale factory, namely, “the factory…as a vast automaton composed of various mechanical and intellectual organs, acting in uninterrupted concert for the production of a common object, all of them being subordinated to a self-regulated moving [mechanized] force”9 is the highpoint of the capitalist mode of production, full automation being its absolute pinnacle.
The factory is a state of existence where workers are subordinated to machines and ultimately reduced to the appendages of machinery, while with the advent of full automation, workers are rendered completely obsolete and unemployed in the name of machinery (more will be said on full automation later). For the moment, Marx states, that “the factory proper…[converts] the worker into a living appendage of the machine”10, debasing the worker’s existence by “constantly exploiting labor-power more intensively”11 via machinery. The tendency of capital is to convert all autonomous working activity within the factory into mechanized activity as “every improvement in machinery [becomes] a more perfect means for soaking up labor-power”.12 Subsequently, according to Marx, “machinery…becomes in the hands of capital the objective means, systematically employed, for squeezing out more labor in a given time”13 from the worker in the sense that machinery both increases the speed of production, resulting in more intensive working conditions for workers and increasingly dominates production by increasingly subjugating workers to ever-expanding mechanical processes, including the elimination of workers outright from the production process.
Henceforth, the result of the introduction of machinery and constant technological amelioration, according to Marx, is that machinery becomes “the most powerful weapon for suppressing strikes, those periodic revolts of the working class against the autocracy of capital”14 because “machinery necessarily throws men out of work in those industries into which it is introduced”.15 It makes workers increasingly obsolete, redundant and factory work, itself, increasingly irregular, as “workers….[become evermore] dependent…on the caprice of…capitalist[s]”16 due to the increasing importance of machinery within the capitalist mode of production; and vice versa, the increasing unimportance of workers within the capitalist mode of production. As Marx states, “machinery revolutionizes …the agency through which the capital/labor relation is formally mediated”17 by producing “a surplus working population [due to obsolescence] which is compelled [itself evermore] to submit to the dictates of capital”.18 Machinery disinvests workers of their autonomy and their decision-making-authority by increasingly reducing the options workers have to sell their labor-power at their own advantage against capital. Full automation takes this logic of technological evolution to its ultimate conclusion, total and absolute unemployment.
Notwithstanding, before we proceed with our analysis of full automation, it is important to note that, according to Marx, “machinery…creates no value”19; however, its initial value as a brand new object/machine, “enters…piece by piece into the process of valorization”19 over a period of time, spread across the quantity of commodities it is involved in producing within the actual production process. For Marx, this is the effect of the depreciation of machinery, whereupon machinery transfers its exchange-value over to the sum of commodities that it is directly involved in producing, namely, “it loses exchange-value”20 in various ways as its value is gradually transferred unto manufactured commodities. Likewise, “the less labor it contains, the less value [machinery] contributes to the product”21 over time, when it is engaged in actual production, while “the [total] amount of value [it transfers to a commodity, when actually utilized in production,] depends on the total value of the machinery”21 when it was first manufactured and procured by capital.
Consequently, according to Marx, a machine never added new value to the production process; in essence, it bleeds its initial value, bit by bit, overtime, both as it sits idle and as it is utilized within capitalist production whereupon it bleeds its value over the mass of commodities, whose production it is involved in producing. For Marx, “the longer the period during which [machinery] functions, the greater is the mass of the products over which the value transmitted by the machine is spread, and the smaller is the portion of that value added to each single commodity”.22 As a result, the more machines are used within capitalist production and the more workers are thrown out of work into the swelling masses of the industrial reserve army means that less and less value is being transferred into real commodities. According to Marx, capitalists rely increasingly on machinery and technological innovation in order to subjugate workers, cheapen the cost of labor-power and ultimately cheapen commodities, thus enabling them to cultivate greater profits as they keep-up with industrial competition within their specific spheres of production.
Initially, the introduction of machinery and technological innovation, according to Marx, made “it possible to produce in a given period of time, with the same amount of labor and capital, a larger amount of products”23, which in turn granted a capitalist an ability to sell his or her commodities more cheaply then his or her competitors, resulting in greater profits and a larger market share for this specific innovative capitalist. As Marx states:
One capitalist can drive the other from the field and carry off his [or her] capital…by selling more cheaply. In order to sell more cheaply without ruining himself [or herself], he [or she] must produce more cheaply, i.e. increase the productive force of labor as much as possible [with less costs then his or her competitor]. [And] the productive power of labor is increased above all by…[the] constant improvement of machinery. [Hence] he [or she] attains the object he [or she] is aiming at if he [or she produces more cheaply via technological innovation and] prices his [or her] goods only a small percentage lower than his [or her] competitors. [Hence, how] he [or she] drives them [competitors] off the field, . .[and] wrests from them …a part of their market, by [ultimately] underselling them.24
Notwithstanding, technological evolution does not end here in the sense that as the capitalist introduces technological innovation within an industry, competition for higher profits will also over time stimulate his or her competitors within the same industry and branch of production to follow suit by utilizing the same new technology so as to keep pace with the new industrial, technological standard created by the newly implemented technology and machinery. The result is that the initial advantage of greater profits, cultivated by the forward-looking capitalist through technological innovation, will over time decline back to a new average low, or even lower, as his or her competitors introduce the same new technology, and inadvertently equalize production costs along the lines of the new industrial, technological standard. In the end, this technological equalization process across a specific sphere of production will nullify all initial profit advantages derived from a new piece of cost-saving technology. Moreover, Marx argues that “when machinery is first introduced into a particular branch of production, new methods of reproducing it more cheaply follow blow upon blow”25 as the competition for higher profits drives an never-ending, evolutionary process for cost-saving technology to new heights and new cost-efficient machinery. Therefore, according to Marx:
The capitalists…[continually] find themselves…in the same situation in which they were before the introduction of the new means of production…forced to furnish double the product for less than the old price. Having arrived at the new point, the new cost of production, the battle for supremacy in the market has to be fought anew…[with] more [new] machinery. And competition again brings the same reaction against this result.26
The process is endless, according to Marx, whereupon the coercive laws of competition acting upon technological evolution eventually erode all profit margins and drive capitalists to amalgamate their individual capitals so as to stave off bankruptcy etc. The consequences are: (1) an never-ending process of technological evolution; (2) an never-ending process by which less and less value is going into commodities due to the fact that more and more machinery is replacing active human labor-power; (3) an never-ending-process by which more and more workers find themselves out of work, filling the ranks of the industrial reserve army; and finally, (4), we see a never-ending process by which all spheres of production are becoming more and more fully automated as machines eliminate greater and greater portions of labor-power and the labor-force from all spheres of the capitalist modes of production.
Notwithstanding, Marx is both correct and incorrect on certain points concerning this evolutionary/de-evolutionary capitalist process. First, it is true, akin to Marx, that technological innovation is increasingly eliminating variable capital; i.e., workers, from all spheres of production. Second, it is true, akin to Marx, that the introduction of new technologies and machinery within the capitalist production process is foremost designed to lower production costs for capital. Three, it is true, akin to Marx, that as production becomes increasingly mechanized, less and less value is being added to each single commodity that is being produced.
To follow Marx’s line of thinking to its logical conclusion, outlined in his rational labor theory of value and surplus value, full automation would not add a single droplet of new value upon any commodity whatsoever. In fact, a fully automated socio-economic system would produce completely valueless goods and objects, its commodities would be completely devoid of value, that is, socially necessary labor-time, in the Marxist sense, due to the fact that any and all socially necessary labor-time would be absent from the fully automated capitalist production process. If, according to Marx, “the only source of surplus-value is living labor”27, then living labor’s elimination from the production process in favor of dead labor; i.e., constant capital or machinery etc., means that less and less surplus value and value; i.e., paid and unpaid labor, are being showered unto commodities. Consequently, where does value and surplus value come from in a fully automated socio-economic system? Furthermore, why does contemporary, post-industrial, post-modern, bourgeois-state-capitalism, which currently sits between the capitalist industrial production studied by Marx and the fully automated production system envisioned by post-industrialists etc., continue to reap record profits, when there is, according to Marx, progressively less and less value being produced and spread across all types of commodities? And Marx is perfectly correct on this crucial point. There is, in fact, less and less value being extracted from labor-power and spread across commodities due to the fact that workers are gradually being jettisoned and eliminated from the capitalist mode of production in favor of machinery and high-tech automation.
Therefore how is it that capitalist enterprises are capable of reducing their production costs to record lows, while continually augmenting their commodity-prices. According to Marx, as production costs go down, logically commodity-prices as well go down, due to the fact that less value is embodied in commodities and that competition forces capitalist enterprises with lower production costs the added advantage of cutting commodity-prices below average market prices so as to wrest from their competitors’ a greater segment of the market and higher profits. However, this is not happening. In fact, to the contrary. As production costs go down, increasingly within post-industrial, post-modern bourgeois-state-capitalism, commodity-prices are increasingly going up and up.
And it is on this point where Marx is in grave error. The reason is that Marx fails to notice that with ever-increasing machinery and technological innovation, which results in the extraction of less and less surplus value and less and less value being spread unto the overall sum of commodities, surplus value is nonetheless being artificially manufactured through conceptual-perception via the arbitrary application of the monetary-form, devoid of any quantifiable and/or prerequisite socially necessary labor-time. In fact, increasingly post-industrial, post-modern bourgeois-state-capitalism is abandoning, with the advent of ever-increasing automation, the limited parameters manufactured by socially necessary labor-time in favor of the unlimited parameters manufactured by conceptual-commodity-value-management, namely, arbitrary, socially constructed value, price and wage-determinations. That is, whereupon value and surplus-value are manufactured via conceptual-perception, through the arbitrary application of the monetary-form unto objects and things, regardless of the actual amount of scientifically quantifiable socially necessary labor-time these objects and things really embody. These arbitrary, socially constructed values, prices and wages, despite being inherently valueless, are nevertheless accepted as valid and legitimate by the vast majority of the population, due to systemic coercion, manipulation and/or ideological indoctrination. That is, a whole system of mental and physical networks that buttress, enshrine and reproduce a whole series of artificially constructed values, prices and wages, that have no connection to actual labor-power expenditures, yet are being normalized and taken as the acceptable status quo.
Marx certainly describes this type of arbitrary valuation process but he identifies this process as an exception to the law of value and his modern labor theory of value. For instance, Marx readily states that “things such as conscience, honor, etc., can be offered for sale by their holders, and thus acquire the form of commodities through their price”25, despite being totally devoid of labor-power and value, due to the fact that “a thing can, formally speaking, have a price without having a value”.20 This is an arbitrary application of the monetary-form onto a thing and/or object that are devoid of labor-power and value. For Marx, “price is the money-name of labor objectified in a commodity”28, while the price-form and/or the money-form “express value…[in the sense] that money [or price] is nothing but the value form of commodities”.29 And as Marx describes above, the money/price-form can be applied to things and/or objects, that have no value whatsoever. This is conceptual-commodity-value-management at work.
However, Marx relegates this arbitrary form of artificial valuation as the exception to the law of value and the modern labor theory of value. He does not conceive that this form of artificial valuation might become the dominant money-form and/or price-form at a future date. In sum, for Marx, this type of arbitrary valuation process is the exception, but increasingly within post-industrial, post-modern bourgeois-state-capitalism, this type of arbitrary valuation process is the norm. This is the primary difference between industrial production and post-industrial production, the industrial revolution and the post-industrial revolution. This is the reason why value and surplus value can be progressively decreasing within post-industrial, post-modern bourgeois-state-capitalism, with less and less value being spread unto commodities, while commodity-prices simultaneously are ever-increasing.
As Marx correctly surmises, but in an abbreviated form, “to establish…price, it is sufficient for it to be equated…in the imagination”29, which means that socially necessary labor-time is essentially unnecessary in the establishment price. And within post-industrial, post-modern bourgeois-state-capitalism, this establishment of price is the norm. It is a post-industrial price-form, a price-from which is both based upon conceptual-perception and socially constructed via conceptual-perception. It is the mind that equates value and price and it is the mind, centralized within a powerful network, that establishes the quantity of value and its expression in money, whether this be through simple whim and/or scientific measurement etc., and within post-industrial, post-modern bourgeois-state-capitalism this increasingly is a matter of the vagaries of ruling oligarchical networks, whose authority, pertaining to specific spheres of production, is nearly absolute and/or totally absolute.
In Capital (Volume One), Marx describes another such example of arbitrary, artificial valuation; i.e., the mechanism of conceptual-commodity-value-management, when he discusses colonization in the United States. Marx describes the mechanism of conceptual-commodity-value-management in action when he outlines the initial difficulties that the capitalist mode of production had in United States in establishing itself. Due to the fact that settlers in the United States still possessed the means of production and access to the land, which was not the case at the time in England. The reason was that land was so plentiful and readily available in North America. As he states:
This is the secret both of the prosperity of the colonies and of their cancerous affliction—their resistance to the establishment of capital [in the sense that]…land is very cheap and all men are free, where everyone who so pleases can easily obtain a piece of land for himself, [and] not only is labor very dear [as a result], as respects the laborer’s share of the produce, but [the] difficulty is to obtain labor at any price. In the colonies the separation of the worker from the conditions of labor and from the soil, in which they are rooted, does not yet exist, or only sporadically, or on too limited a scale. Hence the separation of agriculture from industry does not exist either, nor have any of the domestic industries of the countryside been destroyed.30
As a result, due to American resistance to capital, namely, its resistance to the capital/labor-relation, primitive accumulation and the appropriation of the means of production from settlers, it was devised at the time, according to Marx, that “the government [should] set an artificial price on the virgin soil, a price independent of the law of supply and demand, a price that compels the immigrant to work a long-time for wages before he can earn enough money to buy land”.31 By exercising the implementation of an artificial price, capital could “take the soil from [the worker]… putting him in a space void wealth, so as to leave him no way of living, except according to [capitalist] wishes”.31 Consequently, settlers and immigrants would have to work for capital before acquiring property, thus, enabling certain stability in the American workforce and guaranteeing American capitalists compensation for replacing the elements of the workforce that leave the labor market, due to the acquisition of property and land.
It is in this regard, that the arbitrary application of the money-form and/or the price-form, generated instantaneous value and surplus value upon American landowners, without a single drop of labor-power and/or value expended in any form of production. This whole price scheme was brought about through conceptual-perception and the coercive influence, both soft and hard, of the government upon conceptual-perception. This is how value can be essentially inconsequential to the arbitrary application of artificial price in the sense that the value embodied within an object and/or thing can be nil, yet the price-form can continue to function and operate on things and object, devoid of socially necessary labor-time. Without fully realizing these implications, Marx inadvertently demonstrated that the price-form or the money-form can function and operate, devoid of the law of value, namely, that it does not need the production of value and surplus value in order to manifest and realize surplus-value and value. It can do this through imaginative applications of artificial price and through the social construction of conceptual-perception, pertaining to value, price and wage. Consequently, this is the germination of the post-industrial revolution and the post-industrial price-form, namely, the mechanism of conceptual-commodity-value-management.
Other, more contemporary, manners by which the arbitrary application of artificial price-forms are exercised are in such things as the automotive industry where production costs have progressively decreased over the century while market prices for automobiles have progressively sky-rocketed, taking up a greater portion of an individual’s income. Another example is the data industry where value is applied to gigantic databases, whose soaking up of information and its organization, creates value, devoid of any actual labor-power expenditures embodied within, namely, the absence of all socially necessary labor-time. Consequently, as machinery and technological evolution eliminate workers and labor-power from the capitalist mode of production, manifesting a vacuum pertaining to the accruing of socially necessary labor-time within commodities, the mechanism of conceptual-commodity-value-management is increasingly being utilized to guarantee profitability, stable surplus value extraction and an arbitrary value tag to objects, services and things, regardless of the actual value they embody.
Increasingly, within post-industrial, post-modern bourgeois-state-capitalism, mechanization and automation become, not manners by which to cheapen commodities and labor-power, but manners by which to increase one’s control over price, value and wage-determinations. That is, mechanization and automation enable the captains of industry to set prices, values and wages, according to their own conceptual-perceptions; i.e., desires and whims, devoid of any recourse to socially necessary labor-time and the value law of the capitalist mode of production, first described by Marx. In effect, price, value and wage, are subject to whatever an entity, network and/or enterprise can get away with, that is, can socially construct according to the influence and power it holds and embodies. It is for this reason that service fees magically rise at a moment’s notice. It is for this reason that actors, sport figures and CEOs make astronomical incomes, which have no relation to their actual value and/or expenditure of abstract labor-power or socially necessary labor-time. It is for this reason that fictional values can be applied and generated from labor-less data at the stroke of keyboard and/or the power of the imagination etc. The list is endless.
All in all, the use of machinery and technological evolution is for the exclusive purpose of making values, prices and wages increasingly dependent on the vagaries of conceptual-perception, specifically those of the ruling neoliberal elite. That is, the arbitrary and subjective application of an artificial price-form and/or money-form upon commodities, which have less and less value and labor-time objectified in them and/or no value and labor-time objectified in them, for the purpose of increasing profits indefinitely for a select ruling few. This post-industrial, post-modern process of ever-increasing applications of arbitrary price-forms or money-forms to commodities, services and things, which have no value or labor-time embodied within, results in the fact that: (1) it increases the power of capital over labor; (2) it increases labor’s reliance on credit in order to survive and sustain themselves; (3) it short-circuits the tendency of the rate of profit to fall, ad infinitum, which Marx describes in Capital (Volume 3); and, (4) it permits capitalists, via oligarchical networks, to raise or drop values, prices and wages at will, and indefinitely, in any direction they chose, regardless of socially necessary labor-time expenditures and/or capitalist laws.
As a result, real or actual value; i.e., scientifically quantifiable value, becomes increasingly inconsequential as unreal or fictitious values; i.e., general value, in contrast increasingly become the fundamental basis of post-industrial, post-modern bourgeois-state-capitalism and its all-encompassing market-economy. When real/actual values are jettisoned, everything is capable of succumbing to the arbitrary vagaries of conceptual-commodity-value-management, namely, everything can be anointed with an artificial price-tag, regardless of actual labor-power expenditures and/or the overarching regulating mechanism of socially necessary labor-time exercising its influence. In the end, the regulative mechanism of conceptual-commodity-value-management is designed to fashion ever-increasing financial inequality, whereupon the final conclusion is an all-encompassing financial feudalism, corporate and/or otherwise, which has sucked the population of all its limited financial resources and property.
Part Two
According to Marx, full automation and/or ever-increasing automation, including the production of machines by machines, increasingly subjects the capitalist mode of production to the inherent capitalist law of the tendency of the rate of profit to fall, resulting in ever-increasing explosive crises, the reason being the fact that:
A gradual growth in… constant capital [i.e. machinery, technology, means of production, raw materials] in relation to…variable capital [i.e. living labor-power and/or the workforce]…results in a gradual fall in the general rate of profit [across all spheres of production], given that the rate of surplus-value, or the level of exploitation of labor by capital, remains the same.32
Consequently, as capitalists invest increasingly in technology, fueling technological evolutions and technological revolutions in their various spheres of production, capitalists orchestrate lower production costs for themselves by augmenting constant capital and lowering variable capital. This technological process in turn invariably causes the general rate of profit to fall, across their various spheres of production, due to the fact that variable capital; i.e., workers, the source of surplus-value, are increasingly jettisoned out of the production process in relation to constant capital; i.e., machinery, raw materials, fixed capital, means of production etc. As Marx states, “with the progressive decline in variable capital in relation to the constant capital, this tendency leads to a rising organic composition of the total capital, and the direct result [of this is] a steadily falling general rate of profit”33, which invariably culminates in economic crisis. In this regard, the ever-increasing introduction of automation, and/or, in the end, full automation, leads to an ever-diminishing rate of profit, precarious labor conditions, mass unemployment, increasing centralization of capital in specific centers, increasing concentration of capital in fewer and fewer hands, and an increasing number of valueless commodities. Where, according to Marx, “each individual product, taken by itself, contains a smaller sum of labor than at a lower stage of development of production”34, resulting in ever-deepening economic crises. And, for Marx, on a long-enough timeline, with full automation, value and the general rate of profit are reduced to zero, and thus, in the process, bring the capitalist mode of production to an end, via abrupt and/or gradual conclusive stagnation, whereupon:
the chain of payment obligation at specific dates is broken in a hundred places. And this is still further intensified by an accompanying breakdown of the credit system, [due to vast unemployment], all of [which]…leads to violent and acute crises [of various kinds], sudden forcible devaluations, an actual stagnation and disruption in the reproduction process, and hence to an actual [fatal] decline in [capitalist] reproduction.((Ibid, p. 363.))
The reason is that with less and less workers taking part in the capitalist mode of production, debt is forever on the increase, due to the fact that workers increasingly come to rely on credit to sustain their standard of living, which eventually result in payments to the banks and credit companies being broken, when they can no longer rely on credit to substitute their former living wages. The contradiction that causes this fatal decline is the fact that as the capitalist mode of production pushes towards the absolute development of the productive forces this development increasingly comes into conflict with the specific conditions of consumption, pertaining to markets, which are designed to realize a certain level of surplus value for a certain quantity of commodities. In this regard, the limits of the consumption sphere are the limits of the production sphere and vice versa, in the sense that a market-size places limits on the size of the production process, due to the fact that a market can only sustain and realize a certain amount of commodities. Anything more than this produces overproduction and economic crisis.
According to Marx, this situation, specific to the capitalist mode of production, leads to “too many commodities [being] produced for the value contained in them, [that is] the surplus-value included in this value, [which is] to be realize under the [limited] conditions of distribution given by capitalist production,… [hence] it [becomes] impossible to accomplish this [realization] process [due to the narrow limits of the marketplace, resulting in] ever-recurrent explosions”.35 The point is that by eliminating workers via the constant introduction of new technologies, capitalism is also eliminating its essential wage-fund. That is, wages, which can be utilized both to realize the surplus value embodied in the excess of commodities on the market and, in turn, to eliminate the glut in the market. However, when these wage-funds are not there, due to technological evolution, an excess of commodities lie fallow and lose value over time, resulting in commodities having to be sold below their prices of production and/or market values. This fact produces ever-increasing stagnation and paralysis both in the consumption sphere and in the production sphere. Due to the fact that because commodities cannot be transformed into money, that is, the money that was initially advanced at the beginning of the production process cannot be reconverted, this money is now stuck in the form of commodities and as a result it thus cannot be reconverted back into constant capital and variable capital in order to recommence another cycle of production all over again. This stoppage in the metamorphosis of capital, from money-capital to production-capital, to commodity-capital and back again produces economic crisis and the socio-economic breakdown of capitalism in general.
It is in this regard that Marx states that “the true barrier to capitalist production is capital itself”36 in the sense that it is capital’s inherent drive to continually revolutionize the means of production and machinery at the expense of workers, so as to push capital accumulation on and on, forever driving capitalism towards economic crises. For Marx, “the unrestricted development of the forces of…production—come into persistent conflict with the restricted end [of] the valorization [process] of the existing capital,[that is, labor-power and the circulation sphere]”37, namely, “the more productivity develops, the more it comes into conflict with the narrow basis on which the relations of consumption rest”.38 Because capital has a tendency to lower variable capital and wages to their minimum, it also severely limits its ability to realize value in the circulation sphere, thus placing ever-increasing limits to its ability to reproduce itself. As a result, this type of looming economic crisis leads to a general falling rate of profit, overproduction and the rapid accumulation of capital, since the capitalist law of the falling rate of “profit…is [intimately] bound up with [capital] accumulation”39, it is a both a law aggravated by capitalist accumulation and a law that stimulates capitalist accumulation.
Due to the fact that, according to Marx, “it is the rate of profit that is the driving force in capitalist production”40 and as it falls, it stimulates capital to augment production, cut costs, devalue constant capital, implement technological innovations and/or increase capital investment so as to avert profit rate decline. Nevertheless, according to Marx, the tendential law of the falling rate of profit is an inherent component of the capitalist mode of production, that it cannot remove, due to the fact that it is a lever by which the capitalist system, through the coercive laws of competition, stimulates capitalists to constantly improve upon technology and the capitalist mode of production itself, despite the fact that “the rate of profit will [invariably] fall in the long-run”41, regardless of any intervention. The falling rate of profit is a regulatory mechanism by which capital accumulation is developed and expanded, it is the manner by which “the capitalist mode of production…[pursues] its historical mission, [that is] to ruthlessly expand the productivity of human labor [and to] drive it onwards”.42 As Marx states:
The rate of profit…is the spur of capitalist production…a fall in this rate slows down production…a fall in this rate slows down the formation of new…capitals and thus [this law] appears as a threat to the development of the capitalist production process. [As a result,] it [continually] promotes overproduction, speculation and crisis…the existence of excess [unproductive] capital.43
Consequently, the rate of profit falls almost on purpose so as to spur capitalist production onwards towards new heights of accumulation, extraction and crisis, but also, as a compensation and/or an incentive for this accumulation and in contrast to this fall in the general profit rate, the mass of profit rises for the capitalist via ever-increasing accumulation. Capitalist accumulation in this instance lowers the rate of profit but increases the mass of profit due to market expansion and production expansion. The reason being that the capitalist has increased production, despite a decline in the profit rate, which initially translates into a larger segment of the market and in turn a larger share of profits, due to the fact that this capitalist can sell his or her commodities at a lower market price in a temporarily expanded market, thus prompting a rise in his or her mass of profit.
As Marx states, “as the capitalist mode of production develops, so the rate of profit falls [due to less variable capital being utilized], while, [in contrast] the mass of profit rises”44, because there is an intensification of production above the labor-power expenditure that has been eliminated from the production process, permitting the capitalist to lower his or her commodity prices. Overall, this increasing mass of profit is an incentive for capital to continually expand and ameliorate its mode of production; this mass of profit “is possible because the average socially necessary labor-time required to produce [something]…is greater than the labor-time required with the new method of production”45, that is, the new technological advantage. As a result, the capitalist, utilizing new and improved methods of production, reaps a greater profit than his or her competitors, because he or she can produce below the socially necessary labor-time required in his or her specific sphere of production. For Marx, this is the “double edge [effect of this profit rate] law [in the sense that] a decline in the profit rate [is almost always] coupled with a simultaneous increase in the absolute mass of profit, arising from the same reason”.46 That is, “the same reasons that make the profit rate fall also promote accumulation”47; i.e., technological evolution, cost-saving procedures etc., so as to reap ever-greater sums of super-profits.
However, as Marx argues, this mass of profit in relation to a falling rate of profit, is only temporary in the sense that “the capitalist who employs improved but not yet universally used methods of production sells below the market price, but above his individual price of production, [thus, he or she sees] his [or her] profits[s] rise, [but] only until competition cancels this out”48 via the universalization of the specific technological improvements that have resulted in the cost-saving, labor-process. Consequently, once again, the profit rate falls due to the implementation of new technology across the specific sphere of production, by all those capitalists engaged in the competitive struggle for profits and greater market share, within this specific sphere of production. For Marx, the destruction of capitalism is more or less assured due to this inherent capitalist law of the falling rate of profit, which ever-increasingly spurs capital to ameliorate and expand its labor-processes through increasing automation, increasing implementations of machinery and an ever-diminishing amount of workers engaged in production, ultimately resulting in full automation and unemployment. Indeed, Marx, readily admits that full automation and the massive unemployment that would follow would in effect finish capitalism off, as:
A development in the productive forces that would reduce the absolute number of workers [to zero], and actually enable the whole nation to accomplish its entire production in a shorter period of time, would produce a revolution, since it would put the majority of the population out of action [and/or out of a job].49
It would mean that no value would be produced or be imbedded in commodities. It would also mean that commodities laid-out onto the market would remain there indefinitely, due to the fact that people would not have the funds to purchase them and/or the capacity to transform this sum of commodity-capital back into money-capital and in addition into production-capital etc., due to the paralysis of the circulation sphere, which is disinvested of its consumption fund. Hence, Marx’s argument is that full automation would result in the total breakdown of capitalism because fewer and fewer people could afford to purchase the influx of commodities in circulation, due to a serious lack of a consumption fund.
However, Marx never foresaw that a new price-form/money-form, which was in its infancy while Marx was in the midst of writing Capital (Volume One), Two and Three, could short-circuit the law-like tendency of the falling rate of profit, indefinitely. This new price-form/money-form, which has come to dominate, post-industrial, post-modern, neoliberal-state-capitalism, grows out of Marx’s own theoretical analysis of the structure of value, specifically it grows out of Marx’s idea that “value…[is] not an empirical fact but an ideal”50, it is something inherently conceptual that is only later applied to material commodities. That is, value resides, first and foremost, in conceptual-perception as an ideal. But to develop Marx’s definition of value a little further, if value is an ideal then value is more or less socially constructed through conceptual-perception, both materially and conceptually. Here we have the primary building block for all theories of conceptual-commodity-value-management, that is, that value is foremost conceptual and foremost socially constructed through conceptual-perception. Subsequently, conceptual-commodity-value-management, shifts the source of value, namely, Marxist labor-power, into the more broad formulation of creative-power, which is the productive power of conceptual-perception and labor combined as the fount of general-value. That is, value that is both quantifiable and unquantifiable, material and conceptual, etc.
It is important to note, that creative-power embodies labor-power within itself, in the sense that material labor-power is a type of creative-power that is more specific, scientific and primarily material in nature, while creative-power is a broader term, which encompasses, both scientifically quantifiable labor-power and unquantifiable labor-power, both productive and unproductive activity, and both mental and physical activity, all of which produce general-value. General-value is value generated by creative-power, which is both quantifiable and unquantifiable, productive and unproductive, mental and physical etc. General-value is a broader term that houses Marx’s narrowed definition of scientifically quantifiable value within itself. As a result, the post-industrial, post-modern theory of value and surplus value is based on creative-power and general-value, rather than the narrow definitional confines of Marx’s strict adherence to scientifically quantifiable labor-power expenditures coupled with scientifically quantifiable value.
Contrary to Marx’s rational labor theory of value and surplus value, the post-industrial, post-modern theory of value and surplus value realizes that the accumulation and extraction of surplus value extends far beyond the large-scale factory and encompasses every corner of society. Moreover, contrary to Marx’s rational labor theory of value and surplus value, the post-industrial, post-modern theory of value and surplus value acknowledges that value and surplus value are much more complex and multi-varied concepts, than Marx’s strict scientifically quantifiable notion. In fact, post-industrial/post-modern value and surplus value, on top of Marx’s strict scientifically quantifiable notion, also take into account all the unquantifiable surpluses and values that contribute to the development of the capitalist mode of production that do not have a monetary-form, namely, all the conversations, creative developments and/or creative expenditures etc., that support and buttress the capitalist system, yet go without financial compensation and/or recognition. Contrary to Marx, the post-industrial, post-modern theory of value and surplus value sees the human species as inherently creative, always immersed in the production of surpluses and values of all types and kinds, and not just immersed in the capitalist and Marxist process of quantifiable labor-power production for the sole purpose of producing scientifically quantifiable value. the human species is the fount of creative-power, not just material labor-power.
In fact, “it is only the ideational comprehensive framework of capitalism that places undue emphasis on financial quantifiable capital, while denying the existence, the influence and the utility of all other unquantifiable values and surplus values”.51 Different ideational comprehensive frameworks; i.e., ideologies, define value and surplus value differently, and as a result, construct their societal modes of production differently, according to different parameters and different relations of production like, for example, anarcho-socialism relations of production. Indeed, it is only within the parameters set by anarcho-socialism relations of production that full automation can truly succeed in fully establishing itself, while, retaining a certain level of social stability and equilibrium across all spheres of production and stratums of everyday life. Due to the fact that anarcho-socialism relations of production are able to curtail the coercive laws of competition manufactured by the privatization and artificial scarcity generated by the capitalist mode of production, that is, the privatization and artificial scarcity upon which the capitalist mode of production is based. By severely curtailing capital, anarcho-socialism relations of product are able to gradually inaugurate full automation across all spheres of production, to various extents, without seriously unfastening the population from their vital, reproductive, social relations, etc.
Notwithstanding, returning to our analysis of the falling rate of profit, whenever the profit rate falls, an arbitrary/artificial application of the price-form/money-form can be applied, in order to avert profit rate decline indefinitely. One such example, straight out of Marx, is his idea that in order to rectify and/or avert a fall in the rate of profit, capital resorts to devaluation in order to overcome the falling rate of profit. Devaluation is an arbitrary/artificial application of the price-form/money-form in an effort to re-evaluate/re-price constant-capital according to a subjective and/or arbitrary standard that has nothing to do with the real, actual value embodied in the elements of constant capital; i.e., building, machinery, raw materials etc. As Marx states:
By cheapening…the elements of constant capital,…the devaluation of existing capital (i.e. of its material elements) that goes hand in hand with the development of industry, this too is a factor that steadily operates to stay the fact in the [falling] rate of profit, even though [that] in certain circumstances it may reduce the mass of profit by detracting from the mass of capital that produces profit.52
This arbitrary and artificial subtraction from the real value of the elements of constant capital is management, pure and simple; specifically it is conceptual-commodity-value-management, due to the fact that real value is no longer recognized but is manipulated to a new level so as to avert a decline in the profit rate, which in turn means the avoidance of the types of crises that accompany such declines in the profit rate. Notwithstanding, this is further evidence that price and real value do not necessarily coincide and/or do not have to remain true to each other. This form of devaluation, designed to avert profit rate decline, which is in reality a price/value manipulation, is socially constructed through conceptual-perception. It has nothing to do with the socially necessary labor-time embodied in the elements of constant capital. It is a pure fiction in the sense that one fine day, the value/price of constant capital has been magically re-aligned according to a new set of price-tags, namely, price-tags that have been carefully organized and agreed upon by a select few, who comprise the bulk of constant capital ownership within a specific sphere of production. This is conceptual-commodity-value-management in action, whose actions are underpinned by the fact that value is an ideal and moreover by the fact that value is socially constructed through conceptual-perception. Meaning that: (1) it is the apparatus of conceptual-perception that constructs all relationships between price and value; (2), it is the apparatus of conceptual-perception that sets the validity and legitimacy of price and value; and, (3) it is the apparatus of conceptual-perception that defined price and value according to its own subjective and arbitrary standards, namely, its whims and its fancies.
It is not the fact that Marx’s modern, rational labor theory of value is wrong, or is, wholly obsolete. It is the fact that Marx’s modern, rational labor theory of value and surplus value has been marginalized, that is, pushed into the background as a secondary consideration within post-industrial, post-modern bourgeois-state-capitalism, which increasingly functions and operates according to conceptual-commodity-value-management. Marx understood full-well that the price-form/money-form has inherently no real connection to value and vice versa, and that these two distinct conceptual-forms are dependent on an ideal connection between the two which is, in fact, manufactured by and based on conceptual-perception. Moreover, where Marx sees the arbitrary and/or artificial application of the price-form/money-form as a minor consideration, more or less an exception to the rule of the overarching law of value, within post-industrial, post-modern bourgeois-state-capitalism, this polarity has been reversed. It has been reversed in the sense that it is now the law of value; i.e., the modern labor theory of value and surplus value, that has been pushed to the periphery, having been marginalized and transformed into a minor consideration, while in contrast, the arbitrariness and the artificially of the price-form/money-form has take center stage across post-industrial, post-modern bourgeois-state-capitalism.
The result is that, in the process, Marx’s law of the falling rate of profit, while still present today, has become virtually non-existent. Secondly, the result is that in the process, arbitrary astronomical prices, coupled with lower and lower production costs, have thrown workers and the population in general into ever-increasing debt loads and precarious employment. Thirdly, the result is that in the process, wages for certain segments of the population today have nothing to do with the socially necessary labor-time they expend within production, while for other segments, wages have fallen well below the limits of socially necessary labor-time even as they increasingly work increasingly longer hours. The reason is that the arbitrariness and artificially of the new wage-system, which is based on conceptual-commodity-value-management, has nothing to do with quantifiable labor-time.
In sum, an ever-increasing reliance on theories of conceptual-commodity-value-management within post-industrial, post-modern bourgeois-state-capitalism has thrown old class divisions into disarray, due to the fact that increasingly wages have nothing to do with labor-power expenditures and/or socially necessary labor-time. In effect, as long as the capitalism mode of production remains, the introduction of new machinery, technology and/or full automation will only sow the seeds of resentment, alienation and universal nihilism increasingly deeper into the consciousness of the working population because “capital [is]…an alienated social power which has gain an autonomous position [over the working population via machinery] and [now] confronts society as a thing and as a power”44, which subjugates everything to its insatiable logic and its mechanical processes. As Marx correctly surmised a long-time ago, albeit somewhat differently, that the ever-increasing “accumulation of wealth at one pole is…at the same time [the ever-increasing] accumulation of misery…slavery, ignorance, brutalization and moral degradation at the opposite pole”.53 The solution is nothing other than total revolution, etc…
Bibliography:
Bellemare, Michel Luc. The Structural-Anarchism Manifesto: (The Logic of Structural-Anarchism Versus The Logic of Capitalism). Montréal, Canada: Blacksatin Publications Inc., 2016.
Marx, Karl. Capital (Volume One). Trans. Ben Fowkes. London Eng.: Penguin, 1990.
Marx, Karl. Capital (Volume Three). Trans. David Fernbach. London: Penguin Books, 1991.
Marx, Karl. Wage Labor and Capital. New York, New York: International Publishers, 1976.
- Karl Marx, Capital (Volume One), Trans. Ben Fowkes (London Eng.: Penguin, 1990) 575.
- Ibid, p. 792.
- Ibid, p. 492.
- Ibid, p. 495.
- Ibid, p. 557.
- Ibid, p. 554.
- Ibid, p. 503.
- Ibid, p. 497.
- Ibid, p. 544
- Ibid, p. 614.
- Ibid, p. 544.
- Ibid, p. 542.
- Ibid, p. 536.
- Ibid, p. 562.
- Ibid, p. 570.
- Ibid, p. 608.
- Ibid, p. 519.
- Ibid, p. 531.
- Ibid, p. 509.
- Ibid, p. 528.
- Ibid, p. 512.
- Ibid, p. 527.
- Karl Marx, Wage Labor and Capital, (New York, New York: International Publishers, 1976) 38.
- Ibid, p. 40-41.
- Karl Marx, Capital (Volume One), Trans. Ben Fowkes (London Eng.: Penguin, 1990) 528.
- Karl Marx, Wage Labor and Capital, (New York, New York: International Publishers, 1976) 42.
- Karl Marx, Capital (Volume Three), Trans. David Fernbach (London: Penguin Books, 1991) 248.
- Ibid, p. 195-196.
- Ibid, p. 197.
- Ibid, p. 934-935.
- Ibid, p. 938.
- Karl Marx, Capital (Volume Three), Trans. David Fernbach (London: Penguin Books, 1991) 318.
- Ibid, p. 318-319.
- Ibid, p. 318.
- Ibid, p. 363.
- Ibid, p. 358.
- Ibid, p. 359.
- Ibid, p. 353.
- Ibid, p. 365.
- Ibid, p. 368.
- Ibid, p. 337.
- Ibid, p.Ibid, p. 371.
- Ibid, p. 349-350.
- Ibid, p. 373.
- Ibid, p. 356.
- Ibid, p. 326.
- Ibid, p. 331.
- Ibid, p. 338.
- Ibid, p. 372.
- Ibid, p. 1031.
- Michel Luc Bellemare, The Structural-Anarchism Manifesto: (The Logic of Structural-Anarchism Versus The Logic of Capitalism), (Montréal: Blacksatin Publications Inc., 1916) 1.d).
- Karl Marx, Capital (Volume Three), Trans. David Fernbach (London: Penguin Books, 1991) 373.
- Karl Marx, Capital (Volume One), Trans. Ben Fowkes (London Eng.: Penguin, 1990) 799.