Readings relating to total automation under capitalism

From the film, "Elysium"

Introduction

Suppose progress in AI and robotics manages to eliminate all human jobs: no more human workers. Would capitalism collapse or just sail serenely on, making the elite ever richer while the masses of the dispossessed watch in apathetic horror from outside the gated communities (Elysium)?

The usual Marxist account is that total automation is incompatible with capitalism, yet the standard response is curiously unconvincing. Marxists say that all automation systems are constant capital, and constant capital eponymously can't create new value. Only variable capital, living human labour, can do that. And it's from variable capital that surplus value - profits - are derived.

No workers, no profits.

This argument uses the abstract model of capitalist production developed in Volume 1 of Capital. But it leaves many things obscure.

• What is the special status of human labour, was Marx a vitalist?
• As automation increased, what actually would we see in the economy?
• If total automation brings about some other mode of production, how did we  switch?

Let's see if we can clarify any of this.

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1. Why can't robots produce surplus value?

The question was asked particularly clearly in this Reddit post.

"I've often read that Marx firmly asserted that a machine cannot create surplus value. However, since technological capabilities have changed quite a bit since Marx's day, today I decided to do some research into modern interpretations of this theory.

"I couldn't find a good answer as to why a robot can't produce surplus value (sure, it's constant capital, but that doesn't really explain it), but I did find mention that neither slaves or animals (which are both living) can produce surplus value, which indicates that there is something very particular about the type of work done by machines, not the inanimate-ness of the machines themselves, that prohibits them from creating surplus value.

"This leads to a few questions:

• Why can't robots, slaves, and animals produce surplus value?
• Does the possibility of robots manufacturing other robots affect this?
• What about human-like robots created in the future?

"How can a society be both slave-based and capitalist (like the old American South)?

"Thanks!"

And here is the favoured answer - somewhat accurate but ultimately confused and unconvincing.

"Slaves are like tools since they are owned. If they exist alongside capitalism, they, like all other tools, pass their value on to the commodity but do not create new value. This does not mean that slaves are not exploited and don't produce a surplus for their masters. They do, but this surplus does not take the form of surplus value. In this case all the master's profit is surplus value transferred from free laborers. ...

"Surplus-value production requires a certain social organization. The question then is: What social organization differentiates the slave from the wage-laborer such that one doesn't produce surplus value but the other does?

"The answer is a social organization of generalized commodity production requiring an extensive division of labor. This social organization requires what Marx calls the laborer's "freedom in the double sense":

as a free man he can dispose of his labour-power as his own commodity, and that on the other hand he has no other commodity for sale, is short of everything necessary for the realisation of his labour-power.

"So, the slave/animal/robot must be given bourgeois rights; it must no longer be possible to buy and sell them, they must be considered equal as commodity owners and sellers. The slave/animal/robot must also be driven off the land and deprived of any means of production. This forces them to sell their labor-power to survive.

"If the animal/robot had the mental and physical capacity to function this way under these conditions, they would be surplus value producers."

Marx was not a vitalist, the term 'living labour' is an economic category (a producer of new value, an entity which brings labour-power to market as a commodity), not a term of biology.

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2. Forms of Production

The first step to understanding why the Marxist account is, nevertheless, correct is to carefully distinguish different ways stuff can get produced in a complex economy with a division of labour, requiring trading and exchange. It will become clear that the two critical ideas are the distinction between use-value and exchange-value, and the subtleties of the labour theory of value.

We start by describing three forms of economic organisation: pre-capitalist, capitalist and post-capitalist. Only the second creates surplus value, value appropriated by an economic actor other than the producer.

2a. Simple Commodity Production

Wikipedia has a good account of this pervasive economic mode:

"Simple commodity production (also known as "petty commodity production"; the German original phrase is einfache Warenproduktion) is a term coined by Frederick Engels to describe productive activities under the conditions of what Marx had called the "simple exchange" of commodities, where independent producers trade their own products. The use of the word "simple" does not refer to the nature of the producers or of their production, but to the relatively simple and straightforward exchange processes involved. ...

"Simple exchange of commodities is as old as the history of trade, insofar as it has progressed beyond barter, and occurred for thousands of years before most production became organised in the capitalist way. It begins when producers in a simple division of labour (e.g. farmers and artisans) trade surpluses to their own requirements, with the aim of obtaining other products with an equal value, for their own use. Through the experience of trade, regular exchange values become established for products, which reflect an economy of labour-time. ...

"Simple commodity production is compatible with many different relations of production, ranging from self-employment where the producer owns his means of production, and family labour, to forms of slavery, peonage, indentured labour, and serfdom. The simple commodity producer could aim just to trade his products for others with an equivalent value, or he could aim to realise a profit.

"That is to say, simple commodity production is not specific to any particular mode of production, and might be found in many different modes of production, with various degrees of sophistication. It does not necessarily imply that all inputs or outputs of productive activity are commodities traded in markets. Thus, for example, simple commodity producers could produce some products for their own use on their own land, while trading another part of their products. They might buy or trade some tools and equipment, but also make some themselves. ...

"In Marxian political economy, simple commodity production also refers to a hypothetical economy used to interpret some of Karl Marx's insights about the economic laws governing the development of commodity trade: it refers to a market economy in which all producers own the resources (including the ability to work) that they use in production. No-one is a proletarian, selling his or her labor power to another. Instead, each is self-employed.

"In this imaginary model, there is a direct correspondence between prices and the values of commodities. The model is imaginary, because no such society has ever existed in history; simple commodity production has always combined with some other modes of production, and as soon as a market economy reaches any size, it begins to utilise wage labor in production, and falls under the sway of the laws of capital accumulation."

The take-home point is that in simple commodity production the proprietor is neither a wage labourer nor a capitalist.

Amazon link

In general proprietors trade commodities at their value and do not produce surplus value, as Duncan Foley explains (Understanding Capital, p. 31):

"Consider a system of commodity production in which independent producers buy inputs to production, add their own labor to commodities, and sell the commodities for prices that in the aggregate reflect the labor time expended in the value added to the commodities. We could represent the movement of money and commodities in such a system by the diagram:

C-M-C'

where the producer starts with the commodities he has produced (C) and sells them for money (M) as a way of buying another bundle of commodities (C') that better suit his needs. The commodities purchased (C') have the same value as the commodities sold (C). The motive behind this transformation is not any change in the value owned by the producer but the qualitative change in the use-values he consumes.

When we think of the commodity circulation in this way, we realize that the process comes to an end after one round of exchange. Once the producer has exchanged the commodities he initially owns for the bundle he chooses, there is no reason for any further exchange to take place. If the economic process is to continue, the reason for its continuation must be sought outside the process itself, for example, in the external assumption that the next day the producer will once again find himself with commodities C that are not the ones he wants to consume and will be forced to exchange again.

Furthermore, there could be no social surplus value in this system. An individual trader might cleverly manage to buy some commodities below their real values and sell them at or above their real values and in this way appropriate a surplus value through unequal exchange. But whatever these agents gain in surplus value, some other agents must lose, because of the conservation of value in exchange.

Producers add value to commodities by expending labor on them, but in general they receive in exchange no more than the equivalent of this labor time. Thus there appears to be no way to explain the pervasive appropriation of surplus value as the basis of economic life within this conception.

Notice also that the only conception of accumulation of value in such a system is for an agent to realize more value by selling commodities than he spends in buying them over a period. The difference must take the form of an accumulation of money by the agent. But this accumulated value is simply withdrawn from commodity circulation through the agent's abstinence from consumption.

When the agent finally spends the hoard he has accumulated, he simply returns the money value to circulation and withdraws commodities from circulation of the same value (assuming that the value of money has not changed in the  meantime). There is in this conception no systematic process of accumulation."

2b. Capitalism

Capitalism is a weird mode of production, its strangeness hidden by its historical and geographical ubiquity, as Michael Heinrich explains in his “An Introduction to the Three Volumes of Karl Marx’s Capital” (p. 17):

Amazon link

"In precapitalist societies, the exploitation of the dominated class served primarily the consumption of the ruling class: its members led a luxurious life, used appropriated wealth for their own edification or for that of the public (theater performances in ancient Greece, games in ancient Rome) or to wage war.

Production directly served the fulfillment of wants: the fulfillment of the (forcibly) restricted needs of the dominated class and the extensive luxury and war needs of the ruling class. Only in exceptional cases was the wealth expropriated by the ruling class used to enlarge the basis of exploitation, such as when consumption was set aside to purchase more slaves, to produce a greater amount of wealth.

But under capitalist relations, production for the sake of increasing the capacity to produce is typically the case. The gains of a capitalist enterprise do not serve in the first instance to make a comfortable life for the capitalist possible, but are rather invested anew, in order to generate more gains in the future. Not the satisfaction of wants, but the valorization of capital is the immediate goal of production; the fulfillment of wants and therefore a comfortable life for the capitalist is merely a by product of this process, but not its goal. If the gains are large enough, then a small portion is sufficient to finance the luxurious existence of the capitalist, and the greater portion can be used for the accumulation (enlargement) of capital.

The fact that earnings do not primarily serve the consumption of the capitalist, but rather the continuous valorization of capital, that is, the restless movement of more-and-more accumulation, might sound absurd.

But the issue at hand is not an individual act of insanity. Individual capitalists are forced into this movement of restless profiteering (constant accumulation, expansion of production, the introduction of new technology, etc.) by competition with other capitalists: if accumulation is not carried on, if the apparatus of production is not constantly modernized, then one’s own enterprise is faced with the threat of being steamrolled by competitors who produce more cheaply or who manufacture better products.

A capitalist who attempts to withdraw from this process of constant accumulation and innovation is threatened with bankruptcy. He is therefore forced to participate, whether or not he wants to."

2c. Bureaucratic Socialism

Sam Williams describes the following scenario:

"A single corporation emerges that controls all of production. Let’s call our imaginary corporation the Universal Company Inc.  Its stock is traded on Wall Street and other global stock exchanges. Indeed, it is the only stock traded on the world’s stock exchanges, because it is the only corporation. It is the only business in the world.

Every factory, mill, mine, farm is controlled by Universal’s board of directors. Managers and technical personnel hired by its board of directors determine exactly what kind of goods are produced and the proportions in which each type of good is produced. Under the rule of Universal Company Inc., all workers are employees of the company since there are simply no other corporations to work for. Under the rule of Universal, what is the highest authority that the individual workers face? Why it’s the board of directors of Universal, which is elected by the stockholders of Universal on the principle of one share one vote.

But do the products of the labor of the workers of Universal take the form of commodities? The answer is no. Why not? Remember, Marx defined commodity production as a situation where the producers work for their own private accounts. Producers of commodities exchange the products of their labor and face no higher authority than the mutual pressure they exert on one another. Or what comes to exactly the same thing, the highest authority the producers face is competition among themselves. But this is not the case with the workers of Universal.

Instead of being indirectly social, the labor of the workers of Universal is directly social, as would also be the case under the rule of the associated producers. The board of directors and its subordinate employees such as managers, computer experts, foremen and so on see to it that the workers produce the right products in the right proportions. Since there is no commodity production, there is also no money, since money is simply a form of the commodity. And for the same reason, there is no capital, since capital consists of commodities and money. Where there is no commodities and money, there is no capital. And where there is no capital, there is no accumulation of capital.

The board of directors of the Universal Company Inc. might choose to continue expanded reproduction, but if it does, it will be accumulating use values not capital.

Since I am assuming a class of stockholders, the workers of Universal are indeed exploited. They are forced—just like is the case at the present day—to work some of the time for the boss—the stockholders of Universal—and some of the time for themselves. This allows the stockholders of Universal to live without working.

But the surplus product produced by the surplus, or unpaid, labor of the workers cannot take the form of surplus value, because there is no commodity production and labor does not take the form of value. And where there is no value, there can be no surplus value. And where there is no surplus value, there is no commodity production and no money. The surplus labor of the workers cannot take the form of profit—surplus value realized in the form of money. And where there is no surplus value and no capital, there is no capitalist mode of production.

While some might want to call our imaginary system of exploitation run by the Universal Company “state capitalism” in order to underline its exploitative nature as opposed to the system of cooperative production carried out by the associated producers, they would be forgetting that there have been other systems of exploitation in the history of human production over the last ten thousand years besides capitalism. But our imaginary system would not be a form of capitalism whatever else it might be, because it would lack the essential characteristics that separate capitalist production from other forms of exploitation.

For example, there would be no crises of the general overproduction of commodities, if only because there is no commodity production. In principle, our imaginary system might experience a generalized overproduction of use values, but that is something very different than the crises we experience under capitalism, which combine a generalized overproduction of commodities with a generalized underproduction of use values."

What Sam Williams describes here is an economic description of the "Communist States" emerging from the Russian Revolution and its WW2 aftermath. If you replace bureaucratic domination by workers control, you have a Trotskyist model for the aftermath of a socialist revolution: democratic socialism as the precursor (as the productive forces are developed) of communism. I have critiqued that model elsewhere.

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3. Discussion

To read further on why total automation is incompatible with capitalism, please continue to:

"They dismiss the last workers from their fully automated factories".