Mechanization is also propelled by competition between rival capitalists. The value of a commodity depends on the amount of socially necessary labour expended in its production. If a capitalist can, by introducing technology, reduce the labour for which she pays, while still selling the product at the prevailing price, she will enjoy greater profits than her competitors. This advantage will eventually be neutralized as use of the labour-saving innovation becomes generalized, but this just sets the scene for the next wave of automation. Thus both class conflict and competition between enterprises give capital an intrinsic drive to replace humans with machines. Marx described this as the tendency for capital to increase its ‘organic composition’, that is to say, the proportion of constant (machines, buildings and raw materials) compared to variable capital (labour) (1990: 762).
Machinery also, however, throws capital into crisis. In Capital, Marx alternated between two explanations as to why this is. One, perhaps the most readily understandable, is that because machinery enables capitalists to increase production while (other things being equal) reducing their wage bill, it fosters gigantic imbalances between the increasing volumes of commodities produced and the purchasing power available to buy them. This brings on economic stagnation and paralysis, with factories closing and unemployment lines growing, until enough firms go out of business to eliminate the glut of overproduction and get the system moving again – or a social revolution breaks out.
Marx’s other explanation, less intuitively obvious, but arguably more profound, has to do with the tendency to a falling rate of profit (FROP) (1991: 317–38). Because the value of a commodity ultimately depends on the amount of socially necessary labour required for its production, replacing humans with machines lowers the value of the commodity – and hence, eventually, the price it commands, and the profit per item capital can command. Because automation cheapens goods, it makes each single one of these goods less profitable to the capitalist. In the face of this tendency of the rate of profit to fall – a direct result of automation – capital can, at least for a time, maintain the mass of profits by increasing the sheer volume of production, but it is running against its own value-decreasing machinic momentum. Marx (1991: 339–48) listed a number of ways capital can hold this process at bay or even temporarily reverse it, but the tendency of increasingly machinic production is, again, towards spasmodic crisis, this time caused by the flagging profitability of business, and moments of unemployment, immiseration and social tumult.
introduction: ai-capital
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