A Luddite, An Economist and a Marxist Walk Into a Modern Factory …

The Luddite sees industrial robots everywhere and, fearing negative effects on employment, begins to rage against the machines.

Seeing the same robots, the (liberal) economist exclaims, “What marvelous labor-saving technology. This will maximize productivity, and jobs that are lost in this factory will be replaced with high-tech jobs elsewhere in the economy!”

The Marxist sighs, and responds, “Is this some sort of joke? In the US today, seventeen percent of the American workforce – 27 million individual workers – is unemployed or underemployed.”

 

I imagined this scenario as I read the most recent entry in the New York Times’ consistently excellent series on the iEconomy, which focused on a new generation of robots being deployed in manufacturing.

The new generation is more dynamic and adaptive than previous robots. They can now handle irregular shapes and more delicate objects. Assembly lines can run 24 hours a day, 365 days a year.

While low-cost labor in places like China currently offers an alternative strategy for investors – at least for some products and processes, such as those involving irregular, non-repetitive tasks or those that are low-volume and high-variety – advanced robotics are continually making progress into new and more complex areas of usage.

The New York Times article quotes the Terry Gou, chairman of Foxconn, a key supplier of Apple, Amazon, Microsoft and others, with over one million workers China, indicating that his company will increase its investments in robots. In Gou’s words:

“As human beings are also animals, to manage one million animals gives me a headache.”

Robots, it seems, will increasingly replace labor even in low labor-cost countries.

 

The age-old debate

This issue has been a point of contention since the Luddites began smashing machines in the first decades of the 19th century in England.

In Capital Vol 1, Marx argued that productivity increases tend to lead to a reduction in demand for labor, although Marx celebrated the productivity of mechanization, condemning capitalist relations of production rather than technology itself. And, as fellow OOW blogger Steve Vallas recently wrote, the question of automation and employment animated a vibrant debate among sociologists and economists in the 1950s.

To be fair to economists, not all are as optimistic that technical innovation will continually replace lost jobs with new jobs. Both Steve’s post and the recent New York Times article reference MIT economists Erik Brynjolfsson and Andrew McAfee. The latter note that while the mechanization of agriculture over the 19th century did not generate mass unemployment, “this time around,” when manufacturing is being automated, “job destruction is happening faster than job creation, at least for certain types of workers,” notably those performing routine work.

Economic journalist Adam Davidson has also recently presented a more pessimistic view of the effects of technology on manufacturing employment in an article in The Atlantic. Davidson notes the fundamental problem for unskilled workers: whereas traditional factories provided training and promotion opportunities for entry-level workers, with the advent of computer-run machines factories today mainly require highly-skilled workers using human discretion to manage complex, precision machines, and largely unskilled workers pushing buttons and placing parts as they tend simple machines.

Because of the new technologies, Davidson argues, there is a large gap between the skill sets required for these two types of workers, so little opportunity for unskilled workers to get internal training and promotion. Jobs for unskilled workers are safe only so long as they remain cheaper than robots.

Brynjolfsson and McAfee conclude their post by stating that “The first step to addressing the challenges of this great restructuring is correctly diagnosing it. It won’t do to assume that, just because things worked out in the past, everything will ultimately work out this time as well.”

They refer to the concept of creative destruction, a term that was coined by great economist Joseph Schumpeter, but was based on a broader idea which Schumpeter borrowed from Marx. While free marketeers have co-opted the term creative destruction as an unequivocally positive aspect of markets, Schumpeter himself was, like Brynjolfsson and McAfee, much more pessimistic. Hence, Schumpeter wrote in Capitalism, Socialism and Democracy, directly channeling Marx:

“The capitalist process in much the same way in which it destroyed the institutional framework of feudal society also undermines its own.”

In my view, getting the diagnosis right means returning to Marx’s original arguments on the problem, as sociologists Stanely Aronowitz and William DiFazio did in their 1994 book, The Jobless Future.

Although works like The Jobless Future have made compelling counter-arguments, received wisdom in both policy and academic discourse continues to hold fast to the idea that capital investment in a free market economy will generate enough jobs to provide a decent and improving standard of living for all those willing to put in a hard day’s work.

 

Class analysis

The standard economic analysis focuses almost entirely on markets, emphasizing supply and demand, technology and education. While these are all important parts of the story, this roster provides a fundamentally incomplete view of the basic forces shaping capitalism.

Among the important institutions driving economic change are what Marx called the relations of production, that is, ownership and control over productive resources. These class relations mean that, on the one hand, most people can only make a living by selling their labor on the market but, on the other hand, competitive dynamics force employers to continually eliminate as much expensive labor as possible.

While Marx did not explicitly address the possibility of a postindustrial political economy, his analysis in Capital – about the mechanization of agriculture and the creation of a manufacturing based labor market – framed the question that Brynjolfsson and McAfee and Davidson are asking today.

In addition to new physical technologies, manufacturing managers have also adopted new management systems such as lean production.

While best business practice in the 1950s and 60s was understood to include vertical integration – bringing more work and workers under one roof, in the process providing career pathways for unskilled workers – lean production and related management concepts such as “focusing on core competencies” have intensified the re-marketization of employment.

This has as much to do with the globalization of competition than with technology as such.

More broadly, the relationship between technology, productive capacity, employment and output is mediated by class relations. As Marx argued long ago, it is only under capitalist property relations that increasing productivity and surplus capacity lead to an increasing surplus population of workers who are under- or unemployed. Data on the latter provide clear evidence that labor markets in today’s postindustrial economy are not working for a large part of the population.

In short, the problem does not simply concern the effects of industrial robots and other forms of technical change on employment, as if these relations existed in a vacuum, but how these relations play out in the larger context of profit-driven employment relations under intense competition.

Sociologists of work and labor markets have always focused on the concrete realities of work and labor markets in the here and now, eschewing analysis framed in terms of market efficiency or long-run market dynamics. My suggestion here is that sociologists and other scholars of work and labor markets would be well-served by (re)turning to Marx’s concept of relations of production, to examine how class relations and accumulation for the sake of profit (rather than social need) shape the impact of technical change on labor market outcomes.

9 comments
  1. Thanks for this piece, which gives a valuable overview of the contemporary importance and significance of technological developments and automated production for helping to explain the current economic crisis.

    As I recently mentioned on a sociology list, I began to have questions about the current significance of automation in
    today’s economic crisis recently while working on the volume of correspondence between Raya Dunayevskaya, the Marxist humanist theoretician, and two prominent members of the Frankfurt School, Herbert Marcuse and
    Erich Fromm (see http://marxist-humanistdialectics.blogspot.com/2012/08/marxist-humanist-dialectics-russell.html).

    In contrast with your view that Marx did not explicitly address the possibility of a postindustrial political economy, his discussions of such were closely tied to a concept of post-capitalist society, which can be found in key texts such as the Grundrisse, as well as in Capital.

    Among the topics in the correspondence that provoked the most fireworks between Dunayevskaya and Marcuse especially were the social implications of automated production. Automation was taking hold particularly in heavy industries, such as coal mines and automobile plants,racing ahead from the 1940s to the mid-1960s.

    Though it continued until 1978, the bulk of the Dunayevskaya-Marcuse correspondence took place between 1954 and 1965, years in which Dunayevskaya published Marxism and Freedom, and Marcuse published One-Dimensional Man (as well as Eros and Civilization and Soviet Marxism). Dunayevskaya and Marcuse agreed that technology and automated production were of the utmost importance to understand both the current social conditions and the contemporary relevance (or lack of such) of Hegel’s philosophy and Marx’s theory.

    Marx’s Grundrisse was an especially important text here, having fairly recently been published in a more accessible edition, though still not in English translation. In a nutshell, while Marcuse tended to argue that “complete automation”–which would be realized in a post-industrial society–could end the long night of alienated labor, essentially abolishing the “realm of necessity”, and finally allowing the “realm of freedom” to prevail, Dunayevskaya argued that the potentials of automated production did raise the question of “what kind of labor people should do”, but could never abolish the realm of necessity.

    As Marx wrote in Capital, Volume 3, “The true realm of freedom, the development of human powers as an end in itself, begins beyond [the realm of necessity], though it can only flourish with this realm of necessity as its basis. The reduction of the working day is the basic prerequisite.”

  2. matt vidal said:

    Hi Rusell,

    Thanks for your comment. It’s been years since I’ve read Marcuse’s One Dimensional Man. Perhaps it’s time to revisit. I have not had the opportunity to read Dunayevskaya yet, but I plan to soon.

    Building on your comments, I would note that the difference between Dunayevskaya’s position, that we can never abolish the realm of necessity, appears to be similar to the neoclassical economics assumption that scarcity is an eternal human condition.

    Another way to think about this is the relationship between poverty and freedom. In his discussion of the realms of necessity and freedom, Marx was arguing that freedom cannot be possible with the existence of poverty. We must overcome poverty (and the realm of necessity), before we can have true freedom in the Marxist sense of the ability of each person to fully develop their own potential.

    Technology would provide the basis for this the transcendence of necessity/poverty. BUT, while these are the potentialities, the class structure must also be transformed. As Hannah Arendt noted in On Revolution, through this formulation Marx was arguing that in capitalism poverty (and unemployment) switches from an economic question to a political question.

    That is, we may have the technical basis for eliminating poverty — we are productive enough to provide basic food and shelter, and probably TVs and smartphones — for the entire population. But the reason poverty continues is because of the class structure, that is, private control over the means of production and the wage labor system.

    In short, moving beyond poverty and unemployment is not only a technological issue, but also a class issue.

    best,
    matt

    • Hi Matt,
      I certainly agree with you that poverty and unemployment is not only a technological issue, but also a class issue. But even your own work has shown the dialectic of class and technology is in this very period taking an historic turn, which is urgent to grasp. I want to return to “Race Against the Machine”:

      Especially important for Brynjolfsson and Mcfee’s argument are 3 graphs:

      The first graph shows that, beginning in the 1950s, productivity has increased in every decade, including 2000-2009. In fact, while the 1960s showed the greatest growth in productivity (2.7%), the decade with the second greatest growth in productivity after the 1960s, was 2000-2009 (2.5%).

      The second graph shows that the last decade (2000-2009) is the first since figures have been compiled to show a decline in real median household income.

      The third graph shows job growth to have been in the 20% to 30%+ range in every decade from the 1940s through the 1990s. However, in the decade 2000 to 2010 job growth actually declined 1.1%.

      Brynjofsson and Mcfee write:

      “This reflects a pattern that was noticeable in the ‘jobless recovery’ of the early 1990s, but has worsened after each of the two recessions since then…The historically strong relationship between changes in GDP and changes in employment have appeared to weaken as digital technology has become more pervasive and more powerful.”

      Now, Marcuse tended to argue that even in a society in which increasing automation was the major “centrifugal force” threatening social stability, and poverty and class oppression continued to exist, as long as the “administered population” had the “goods delivered” (employment, rising standard of living), not many realistic prospects for social change appeared on the horizon. And many radicals and Marxists, who were not necessarily “Marcuseans”, reflected this sort of resignation.

      But we have just completed the first decade in more than half a century in which productivity has continued to soar, but income and job growth have plummeted. Traditional Left demands, for various wealth redistribution programs and even economic growth programs in which full employment is supposed to return, seem unrealistic.

      In Capital, Marx argued that the ultimate contradiction of capitalism, what would not only make the whole social formation non-viable, but also provide the ground of a new, non-exploitative post-capitalist society, was the following:

      Two contradictory forms underlay capitalism’s historical development–the value and material forms of wealth. On the one hand, the value form of wealth is dependent on direct labor–yet the intrinsic drive of capital is to to cheapen and even eliminate this sole source of value. On the other hand, material wealth, or what Marx called “real wealth” is decreasingly dependent upon direct labor in production–many fewer hours of labor can create much more material wealth. That is why Marx down-played wealth redistribution programs and celebrated the fight for the 8-hour day in the post-Civil War labor battles in the U.S. As we see in the following, Marx had in mind a post-capitalist society, when he wrote in Capital, Volume 3:

      “It is one of the civilizing aspects of capital that it extorts…surplus labor in a manner and in conditions that are more advantageous to social relations and to the creation of elements for a new and higher formation than was the case under the earlier forms of slavery, serfdom, etc. Thus on the one hand it leads towards a stage at which compulsion and the monopolization of social development (with its material and intellectual advantages) by one section of society at the expense of another disappears; on the other hand it creates the material means and the nucleus for relations that permit this surplus labor to be combined, in a higher form of society, with a greater reduction of the overall time devoted to material labor.”

  3. matt vidal said:

    Hi Russell,

    Building on what you’ve said, Marx also discussed the concept of relative surplus value, which referred to the following process: As productivity improvements seize on those industries that produce consumer goods, this increases surplus value by decreasing the cost of labor. If it is cheaper to buy food and shelter and TVs and computers, this provides a boost in surplus value for capital. At the same time, however, it also makes creates improvements in the standard of living, and this can happen even in the context of stagnating wages. This provides a partial explanation for why there is so little movement for social change despite stagnating wages and a shitty economy.

    Given the productivity improvements created by Walmart and others with retailer-driven supply chains — not to mention global labor arbitrage from outsourcing production to China etc — Americans can have a pretty decent standard of living despite a stagnating economy that produces polarized job growth.

    Also, your quote from Marx on the distinction between creating value (that which can be sold on the market) versus wealth (material goods and services) is key. This could provide a basis for criticizing the obsession with growth, which obscures distributional problems.

    cheers,
    matt

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