Two speculative views of what comes after capitalism for those without enough imagination to picture themselves on a beach having group sex.
The first offer some discussion of the so-called Left accelerationist writers Nick Srnicek and Alex Williams. Left accelerationism is a sort of awkward nerdy, pimple-faced techno-fetishism that seeks to make Nick Land palatable to Sanders supporters.
The second discusses the even less credible argument, put forward by Channel 4 News in-house radical Paul Mason. Mason is … well, the Channel 4 News’ idea of a radical, if a radical worked for Channel 4 News. Of course no radical actually works for Channel 4 News, but if a radical did work for Channel 4 News, they would likely be a radical just like Paul Mason.
The starting point of these conceptions of life after the class-war, is the now ubiquitous prediction that soon capitalism will no longer generate enough new jobs to go around owing to the replacement of human living labor by machines.
As someone who knew more about “how capitalism works” than the whole of Nobel Prize winners since his death, this observation was already old news for Keynes in 1930. Since the idea there soon will not be enough wage labor to go around is easily more than 100 years old, it is entirely unremarkable, even banal.
Where are our new robot masters?
Let me make an observation about this: saying there are not enough jobs to go around is like saying the rate of profit will collapse. In fact, predictions that the rate of profit will fall is identical to saying jobs are going to go away for the simple reason that capitalist only hire workers if they can make a profit by doing so.
As Marx argued in volume 3 of Capital, everyone and his grandmother made the prediction the profit rate would collapse, but what none of them could explain is why it didn’t immediately collapse, or collapse in the short run:
“[The] difficulty which has hitherto troubled the economist, namely to explain the falling rate of profit, gives place to its opposite, namely to explain why this fall is not greater and more rapid.”
The problem posed by the arguments of Srnicek and William, and Mason is to explain why, if they are so sure jobs are going away, jobs haven’t gone away yet? Why if evil capitalist robots are coming for our jobs, are these evil capitalist job-consuming robots taking so long to get here? It can’t take much of a technological leap to produce a robot that can make a hamburger for McDonald’s, can it? What is the hold up?
Communism may be free time and nothing else, but it really doesn’t matter to the capitalist if the wage slave experiences this free time as unemployment or as a leisurely day sipping pina coladas on the beach. I can’t think of a single capitalist who cares about how and under what conditions the worker experiences her “free time”. Thus, if it were profitable to replace the entire labor force with robots, no capitalist would hesitate for even one second to do this.
The prediction that jobs are going away have been made for decades; what has never been explained is why they never actually finally go away and why the number of workers employed constantly expands even as the need for labor declines.
Jobs and Profits
According to Marx, the rate of profit did not fall as rapidly as most economist predicted because of six influences he calls counter-tendencies. Since jobs creation is a direct function of the profitability of capitalist production, these six counter-tendencies to the falling rate of profit are likely the reason jobs don’t go away despite every prediction over the last 100 years that they will.
Job-creation is always and everywhere motivated by profit.
Keynes’ argument was that by 1930 jobs were going away at such a rate they would soon have to be rationed. Assuming a 2% increase in the productive capacity of society, within 100 years (2030), productivity should have increased eight-fold. Even with a growing population to feed, clothe and house, the need for labor should have declined to about fifteen hours a week, or less than two current days of labor. Instead of working five days and having two days off, we could be working two days with five days off — basically, the weekend would become our workweek.
Some economists who have compared Keynes prediction to actual historical data suggest he was conservative in this estimate. However, even limiting our discussion to this conservative estimate, Keynes calculation means that, today, as much as three work days out of five are wasted pure and simple. We could call this the productivity paradox: as labor productivity increases, the efficiency of labor declines.
It seems that at a certain point in development of the productive forces, no additional increase in labor time adds to the total output of society. Beyond this point, real output actually declines in proportion to the duration of labor expended by the producers.
Prices, jobs and profit
Now let me throw another complicating factor into the mix: What is the connection between jobs, profits and inflation?
Let me argue that the rising inefficiency of labor has consequences for prices. You can’t waste three days of labor every week without this showing up in rising prices. Thus, the declining efficiency of labor implies production prices are increasingly diverging from production costs. While production costs are declining just as Keynes predicted in 1930, production prices are constantly rising.
This might explain the persistent secular inflation we have experienced since the 1930s when Keynes first made his observations. Persistent inflation is likely the price expression of the fact average hours of labor are not declining as Keynes said they will, and it may also explain why the rate of profit has now declined as rapidly as 19th century economists expected it too.
An extremely important caveat to the above argument is called for here: By definition, since capital is production for profit this can happen even if the inflatonary price impact of rising inefficiency is never seen at the level of a capitalist firm. Which is to say, bizarrely enough, production costs paid out by capitalist firms could be dropping even as their production prices are rising. The general rising inefficiency of labor is externalized by individual capitalist firms.
To restate Keynes prediction in price terms, the costs of production should be falling and prices of production should reflect this fall. If prices fell along with costs, a worker could afford the same standard of living with less labor. Since her cost of living is falling, she would not need to work as many hours to make ends meet. Another way to say hours of labor have not fallen as Keynes predicted, is that production prices have not fallen while production costs have.
If Keynes was correct in his calculations, owing to generally rising inefficiency of labor it now takes 40 hours to produce what could be done in only 15 hours. If in each hour of labor a value of $10 could be produced, we are spending roughly $400 to produce a commodity with a labor value of only $150. $250 of costs cannot be accounted for. In an economy the size of the United States, this means roughly 10-11 trillion dollars of GDP is pure wasted economic activity creating no new value at all.
What accounts for this waste of resources? This question, as I hope I have shown, also can be restated this way:
“Why are jobs not going away?”
And it also can be restated this way:
“Why hasn’t the rate of profit fallen to zero?”
In other words, I would suggest that all three questions are just different ways of describing one and the same phenomenon.
A new approach to the problem
The critical missing piece of information that answers all three questions is explained by what is commonly called the “transformation problem”. As everyone knows, Marx tried to explain how the labor value of commodities were transformed into the prices of commodities in circulation. This explanation is absolutely critical to the labor theory of value because without it the labor theory of value is simply a silly abstract concept that has no real-life influence on the so-called ‘economy’. If value does not in some way determine the prices of commodities, then what is the point of even discussing it?
The transformation problem was a stubborn one for Smith, Ricardo and a whole slew of economists before Marx. No one could explain how prices formed in a capitalist economy and thus could not demonstrate labor had anything to do with prices. Since that time, every economist that I know of who has looked at the problem argues Marx more or less failed to adequately explain how values, created in production, became prices in circulation.
There are two important things to say about this conclusion:
- The economists are entirely correct: Marx indeed never proved the values of commodities equal their prices;
- Instead, Marx demonstrated something else altogether: why the values of commodities could NEVER equal the prices of commodities.
Marx looked at the problem and said, “Of course you can’t prove the prices of commodities are equal to their values because the prices of capitalistically produced commodities can never equal their values.”
To understand why this must be true, consider that the value of any commodity is the socially necessary labor time required for its production. However, in the opening of volume 3, Marx explains the capitalist production price of the commodity is the socially necessary labor time required to produce the commodity PLUS an average rate of profit. Simple mathematics will demonstrate that the socially necessary labor time required for production of a commodity, (“v”), can never equal this socially necessary labor time plus some average profit, (“v+s”).
There are, of course, two notable mathematical exceptions to this equation, but both are themselves incompatible with the normal operation of the capitalist mode of production. They are:
The above equalities mean either no living labor is used in production or no surplus value is being produced in production. If no surplus value is produced, no capitalist accumulation takes place. And if no living labor is used in production, there cannot be any surplus value produced and no capitalist accumulation takes place. In either case, if v=0 or s=0, capitalist production has collapsed. Marx therefore concluded that Smith and Ricardo were correct to be concerned about the falling rate of profit, because this tendency predicted eventual capitalist collapse.
Why jobs don’t go away and profits do not fall explained
However, as I stated earlier, the problem economists had in the mid-19th century wasn’t explaining that capitalism would collapse, but explaining why it didn’t. And this question, as I have already argued, can be posed in three different forms:
- Why didn’t the profit rate fall to zero as most economists predicted?
- Why didn’t jobs go away as so many today still predict?
- Why do production prices constantly diverge from production costs, i.e., what is inflation?
Simply put, jobs did not go away because the profit rate did not fall to zero; and the profit rate never fell to zero because production prices diverged from production costs. Or, as a bourgeois simpleton recently explained, inflation is being used to keep the rate of profit from falling and the emergence of a massive population of unemployed workers, at least in the most advanced industrialized countries:
“[Society] has evolved a relatively painless way to adjust costs to weaker revenues. Macro-economists christened it “money illusion”. They did not invent it, but merely discovered it. Steady nominal growth of real growth plus (perhaps) 3% inflation gives enough room for less severe job cuts in recessions, as nominal wage increases can be limited allowing real wage cuts without people feeling too bad, i.e. far better than losing their jobs. This gentle let down allows real costs to be brought into line with weaker nominal revenues. Money illusion acts like a pain-killer, for a sick person.”.
Okay, so here is the bottom line point about the economic argument I am making above:
Labor theory as more than 20/20 hindsight
Marxists have this way of retrospectively explaining the real movement of society in terms of their pet theories. Some of these theories are interesting, but most of them are just ridiculous boilerplate in which actual historical events are forcibly fit into some new theory or justified by some unprovable assumption. This sort of approach is mostly self-defeating; since very often we cannot examine the counterfactual case. We cannot roll back history and get a redo, so we have no way of proving their arguments one way or another.
However, if a theory is actually scientific, we have an alternative: we should be able to predict future events and not just explain past ones. And this is what Marx did: he predicted an event he referred to as “the breakdown of production on the basis of exchange value.” And he made this prediction almost 70 years before it actually happened.
Thus, we don’t have to speculate about whether labor theory explains why production prices diverged from production costs, paralyzing the tendency for the rate of profit to fall, and thus allowing jobs to not go away as Keynes predicted in 1930. We already know why this happened because Marx predicted it would happen and his prediction can be found here.
Of course, if any of you dumb academics care to challenge my interpretation on this, be aware that my interpretation of Marx is not new by any means. Henryk Grossman restated Marx’s argument in no uncertain terms in 1929 on the eve of the Great Depression. According to Grossman, if Marx’s theory was correct,
“Beyond a definite point of time the system cannot survive … There is a growing shortage of surplus value and, under the given conditions, a continuous overaccumulation. the only alternative is to violate the conditions postulated. Wages have to be cut in order to push the rate of surplus value even higher. This cut in wages would not be a purely temporary phenomenon that vanishes once equilibrium is re-established; it will have to be continuous. After year 36 either wages have to be cut continually and periodically or a reserve army must come into being.”
By applying inflation to wages, as the bourgeois simpleton explained above, real wages can be cut to fluff up profits; as profits were fluffed up, job-creation would continue. The capitalistic job-consuming robots that strike such fear into some economists could be held off at least for a period of time. That period has turned out to be about 80 years, so far.
Oh, yeah. One final thing that deserves mentioning: this mechanism for keeping jobs from going away is what broke down in 2008 — so, yeah, we’re fucked.