Automation: Celebrating the final victory of capital over wage labor

I hope you have read this article from the World Economic Forum, “After replacing 90% of employees with robots, this company’s productivity soared”. If not, go read it and then come back to this post. I am going to tell you something you probably cannot figure out on your own — not because you are stupid, but because the way capitalism works conceals it from you:

It’s hard to argue against automation when statistics are clearly illustrating its potential. The latest evidence comes out of a Chinese factory in Dongguan City. The factory recently replaced 90 percent of its human workforce with machines, and it led to a staggering 250 percent increase in productivity and a significant 80 percent drop in defects.

Changying Precision Technology Company’s factory used to need 650 human workers to produce mobile phones. Now, the factory is run by 60 robot arms that work around the clock across 10 production lines. Only 60 people are still employed by the company — three are assigned to check and monitor the production line, and the others are tasked with monitoring computer control systems. Any remaining work not handled by humans is left in the capable hands of machines.

According to Luo Weiqiang, general manager of the factory, the number of people employed could drop to just 20, and given the level of efficiency achieved by automation, it won’t be long before other factories follow in their footsteps.

Bullish for automation. Bullish for profits. Bullish for capital.

Perhaps, but let’s follow the process all the way to its conclusion.

Of course, as the writers note, the huge increase in the productivity of labor, “comes at a price, though: our jobs.” But, no matter the immediate costs in employment of wage workers, the capitalists are going to automate, because, at least initially, it is profitable for them to automate. As Marx put it, the reduction of living labor in production “even seems in certain circumstances to be the nearest source of an increase of profits”.

Which means the capitalists will be sawing off the tree limb they are sitting on, expecting the tree to fall, not the limb. They will automate both because it is profitable in the short run to do so and because they have no more idea that labor is the source of their profits than you do.


The way automation works is easy to understand:

First, the capitalists will automate the factories and realize massive increases in profits by slashing the amount of living labor in production and reducing their costs of production. Profit is the motive of all capitalist production and with profits rising employment will be rising along with it.

Profits, profits, profits mean Jobs, jobs, jobs!

Everyone will be overjoyed and we will join hands and sing, “Happy days are here again!” And so on.

Then, while we are busy celebrating the final victory of capital over wage labor, the second part of the automation process kicks in, when the rate of profit plunges. The rate of profit plunges because the same automation that increases profits reduces the amount of living labor, the source of all profits, that is now being used in production. Profit falls because the employment of living labor in production falls. With less profits there is less demand for labor power. When this happens, businesses go bankrupt, millions get thrown into the streets, entire states collapse.

In the first place, consumption conditioned on wage labor was always a farce because it never applied to the capitalists. Now, however, consumption conditioned on wage labor loses even its historical justification because there will be no wage employment to be had no matter how low wages fall. Consumption conditioned on wage labor basically becomes a death sentence for billions of wage workers who can no longer find jobs as a result of the increased productivity of social labor. The less wage labor there is, the harder it becomes to justify conditioning consumption on the performance of wage labor.


We are so fucked, you can’t possibly imagine how fucked we are.

When automation hits the fan, it’s going to trigger every crazy anti-semite, racist, nativist, neo-nazi conspiracy theory nut-job on the planet. In the ensuing catastrophe, all the Alex Joneses will gather their followers and go off trying to find a scapegoat who turned utopia into dystopia overnight. Meanwhile radical parties everywhere will demand still more wage labor to fix the problems caused by wage labor.

At that point, no one will be thinking about “A new world is possible”, because they will be too busy desperately trying to bring back the old world.

This problem cannot be fixed with food stamps, single-payer, UBI or any other scheme to save the profits of the capitalists. Since the problem consists entirely of the fact that less labor is being employed in the production of commodities, it can only be resolved by abolition of wage labor itself; the progressive reduction hours of labor until unemployment disappears.

Make no mistake: we are going to crash big time while, on the one hand, fascist idiots claim reducing labor creates jobs; and, on the other hand, radical idiots claim the problem can be fixed with UBI. No one is prepared for 50% unemployment. If you think neo-nazi groups are a problem now, wait until entire communities, cities, counties, etc. are unemployed; if you think nativism is a problem, wait until citizens are fighting Mexican migrants to pick tomatoes.

The capitalists are now fucking with forces they don’t even begin to comprehend. In a matter of days in 2008, the failure of a bank in New York, brought down governments in Europe. Do you really think you can address the problem of automation with your reformist schemes?

5 thoughts on “Automation: Celebrating the final victory of capital over wage labor”

  1. Capitalists believe they’re going to industrialize outer space and fix global warming at the same time. They’re not concerned about temporary social discomfort producted by capitalism’s drive toward a better future. No problem.


  2. Great commentary.

    I found the increase in productivity interesting => “The factory recently replaced 90 percent of its human workforce with machines, and it led to a staggering 250 percent increase in productivity and a significant 80 percent drop in defects.”

    I believe that I have seen you comment in the past that every reduction in hours of labour over the last 100 years or so has resulted in an increase in productivity; please correct me if I’m wrong.

    When hours of labour decreased from 12 to 10 to 8 hours per day and the work week decreased from 6 to 5 days, did productivity not increase? I believe it did.

    If the entire economy was to shed 90 percent of its human workforce, I could not predict that productivity would increase by 250 percent, but assume something more modest, say half that, 125 percent. I could imagine under that condition that most of the products and services we need to survive would get to free or near free fairly quickly.

    UBI seems to have become the go to solution to combat job loss due to automation. As far as I can tell UBI is simply a proposed way to allow those displaced by automation, or those at the lower end of the wage scale, to continue to consume enough to prop up the capitalist mode of production.

    If the proponents of UBI would come clean on that, they could be taken much more seriously. If UBI was seen as a stop gap measure for the transition to 90% unemployment, slowly disappearing as the perceived need for currency evaporates; it “may” have some merit.

    Liked by 1 person

  3. Great post! I agree that, as far as right-wing scapegoating is concerned, we ain’t seen nothin’ yet. They will flail about to find any concrete thing to pin the problem on, missing the very abstract domination of the market. Since you are a fan of Postone, I’m sure you have read this article on “Anti-Semitism and National Socialism” already, but I am linking it here for other readers because it ties in perfectly with this:

    I do need to quibble slightly about how you describe the economic consequences of the mobile phone factory’s automation working out. The real “problem” from the standpoint of this factory (which is really a blessing from the standpoint of society) is that this factory will find many imitators. This newly-automated factory is currently making above-average profits. Capital will flood into the mobile phone businesses seeking to imitate its methods and profits.

    At first, production of mobile phones will explode. This will create a huge surplus of mobile phones that will not be able to be sold at existing prices. There will be a desperate struggle among the mobile phone competitors for market share. To obtain market share, it will be in the individual interest of some of these new entrants to cut their prices on mobile phones until mobile phone production is once again yielding average profits (given the usage of the new, most-advanced techniques this time! Any producers using the old labor-intensive techniques will lose money at these prices and go out of business).

    The market for mobile phones might expand a bit given the lower price on them, but probably not enough to absorb all of the increased production, given the more efficient methods, and so even some of the new, automated mobile phone producers will end up going out of business to bring the supply of mobile phones back down to a level where they can be reliably sold off for an average rate of profit.

    The end result will be that mobile phone producers, including this initial innovative firm, will be forced by the pressure of competition to reduce the prices on their phones so as to erase the super-profit that they are now (temporarily) enjoying.


  4. A factor to consider is this factory resides in China, where they deal with market forces in a more “proactive” way. Apparently, this factory upgrade happened in 2015. I’d be curious to see how you’d apply your analysis to how it has played out so far. I wouldn’t know where to even begin searching for economic data on specific industries from China, however.

    Here’s a recent article, probably among many, that speaks to Jehu’s larger point:

    China’s unemployment today seems to be a mix of both advancing technology as well as policies designed to curb steel/coal overproduction.


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