A reply to J: What if the capitalists don’t want to reduce hours of labor?

by Jehu

I received an interesting comment on my last blog post, that asks several important questions about the practical impact of reducing hours of labor:

  1. Is it possible that capitalists will not automatically respond to a reduction in hours of labor by increasing investment in automation?
  2. Does the decision to increase automation in response to a reduction of hours depend on the nature of the industry in Greece?
  3. Won’t there be sectors where productivity cannot be substantially increased through automation?
  4. Might capitalists instead decide to move their capital to places where cheaper labor power can be found?
  5. Might a reduction in hours of labor reduce productivity by causing a labor shortage?
  6. What if capitalist simply decide they cannot improve productivity by investing in machines and decide to move their facilities?

Robots weld the bodyshell of a Toyota Camry Hybrid car on the assembly line at the Toyota plant in MelbourneFirst, my argument on the effect of a reduction of labor on introduction of machinery is a long established observation dating back to the 19th century. This observation has been confirmed in empirical studies even in the period since the 2008 financial crisis. Reducing hours of labor must result in the replacement of labor by machines. I do not believe there is any credible evidence to the contrary.

Second, I think it should be clear that reducing hours of labor is a class struggle in which the working class has to impose its will on the capitalist class. The capitalist class will, of course, resist this imposition, just as it resists any change in wages, benefits or working conditions. In other words, we should expect the capitalists, who have never supported a reduction of labor hours (except, perhaps, in a few isolated instances — Ford, Kellogg, etc.) will resist any reduction of hours that threatens their profits.

Like a wage increase, hours of labor reduction bring the two classes into direct confrontation with one another. And this, of course, is because the length of the working day directly determines the quantity of surplus value the working class produces. All else held equal, the longer the hours of labor the greater the quantity of surplus value that can be extracted from the working class in a given period.

The general rule is that (all else held equal, of course) the longer the working day, the greater the mass of surplus value that can be produced; the shorter the working day, the less surplus value can be produced. Since the capitalists are only concerned about profit and profit is simply the mass of surplus value that can be produced, as a general rule, the capitalists fight for the longest possible working day. (For further information on this in labor theory, see Capital, Volume 1, Part III: The Production of Absolute Surplus-Value.)

This is presently a one-sided fight for a simple reason: since the Great Depression, the working class has also fought for more jobs rather than emancipation from labor. So, both classes seem to fight for the longest possible working day, but for different reasons: The capitalists because as a general rule the longer the working day the greater the mass of profits; for the working class, the more poverty and unemployment press on it, the more they see labor as a path out of poverty and unemployment.

I say this in order to explain the skepticism with which calls for a reduction of hours of labor is met among working class activists. It is by no means a surprise, since keeping people poor and unemployed is an excellent way to make them desperate for work. If advocates of less work meet with open hostility from the capitalists, they should expect no less than confused skepticism from the working class.

Given that the mass of surplus value, of profit, is a direct function of the length of the working day, it is not particularly interesting that many capitalist will seek to respond to such a reduction, not by greater investment in improved machinery, but by seeking to find cheaper labor power. Questions 1, 4 and 6 essentially cover this situation.

For whatever reason, a capitalist forced to accept a shorter working day/week might very well decide to move his or her facilities to another location. This happened in the Boeing strike, where the company, seeking to impose its will on the working class, threatened to move its production. It also happened in Argentina, where many capitalist pulled their capital out and even tried to move their facilities.

In the Boeing strike, the workers capitulated to Boeing’s demand, but not in Argentina — there thousands of workers seized their factories and ran them as co-operatives. A similar response could be facilitated by laws like the one proposed in the Communist Manifesto, which demands confiscation of the property of emigres. Any capitalist who tried to remove his facilities from Greece would be subject to immediate confiscation and the facility placed under the control of the workers.

Is this an unlawful impingement on the free movement of capital? Eminent domain is well recognized in international law in almost all countries the state has the power to seize property on grounds of economic necessity. Even as I write this, Washington is going ahead with the seizure of land in the Midwest to facilitate the Keystone XL pipeline. Eminent domain is also recognized in the EU: the UK, for instance, exercised compulsory purchase for the 2012 Olympics according to this paper:

“As in the case of other nations, various laws in the United Kingdom authorize government agencies to seize and then purchase private land for public use without the consent of the owner, says RICS. The power to do so is called “compulsory purchase.” (The United Kingdom does not use the term “eminent domain” or expropriation.)”

So far as I know, the UK is a signatory of the Maastricht Treaty. Am I correct that it is? An attempt by the capitalists to evade a reduction in hours of labor could easily be thwarted by the workers bringing these facilities under their direct control. Indeed, with threat of confiscation hanging over their heads, many capitalists might choose voluntarily to sell their property to the state if it were to offer to buy them out. Once in the hands of the state, these capitalist firms could be converted into co-operatives, managed by the workers in trust.

Question 2, 3 and 5 touch on the problem where it may not be possible to increase productivity. The questions are relevant, since, according to the commenter, perhaps 80% of the economy is in the so-called tertiary sector. The commodities produced in the tertiary sector are often immaterial and directly produced in the form of a service from one person to another.

I would not get hung up on this sector, since we are not concerned about goods versus services, nor material versus immaterial commodities. A reduction of hours of labor, like state fiscal and monetary policies, acts on the entire economy all at once. The fascist state does not concern itself about whether it might be giving an incentive to wasteful employment of money-capital — like stock market speculation — when it reduces interest rates; likewise the state does not concern itself that, by raising interests rates to cool an economic expansion, it drives thousands of small businesses into bankruptcy.

In much the same way, a SYRIZA government should not concern itself with whether one or another capitalist can compensate for fewer hours of labor by increasing automation of the labor process at his concern. If the capitalist cannot recover profitability, he will have to go bankrupt.

This is not a defect. Many companies survive on the margins of bare profitability only because the wages of the class are so low, or hours are so long, or both. These are companies we should want to go bankrupt because they are the low hanging fruit of our goal to abolish wage slavery. Our goal is not to enable these firms to survive by keeping wages low and hours long, but to force them into bankruptcy quickly. By driving these low productivity firms into bankruptcy, the productivity of the entire economy is no longer weighed down by them.

Workers who are laid off by bankruptcies will easily find jobs in other sectors experiencing a shortage of labor power as the result of a reduction in hours now being supplied in the labor market. And, as always, SYRIZA or any left government should have strong social services and transitional programs in effect to support the working class for the period of transition.

In this regards, the most bloated sector of the economy is the state itself, which produces nothing, but only consumes what others create. In measure as hours of labor are reduced, this sector will be effected like all the others. In the case of private capitalist firms, it may be necessary to increase total employment to offset a reduction in hours, which will have the immediate effect of reducing total output per worker per week.

I assume employment overall will increase since profitable firms must increase employment to recover lost output. Such increased employment is key to reducing unemployment in the whole economy and absorbing the mass of workers who may get displaced by companies going bankrupt.

However, unlike employment in the so-called private sector, no attempt should be made to compensate for fewer hours of labor per employee by increasing the total number of workers in the state sector. Twenty-two percent of all workers are employed in this bloated sector of the economy. If after a reduction of hours of labor in the whole economy, employment in the state is held constant, workers entering the economy will find work among private capitalist firms and the relative size of the state sector will decline.