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Marx and Automation

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alanjjohnstone
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Marx and Automation

A lengthy critical article on Marxist economic theory and the effects of automation. Far too complicated for my limited understanding but i think others may find it of great interest. I'm pretty sure it overlaps with other discussions on the forum.

Perhaps someone more acquainted with the arguments can reduce the analysis to a few simple sentences for the simple-minded like myself to understand.

http://dissidentvoice.org/2017/07/a-structural-anarchism-critique-of-aut...

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In sum, an ever-increasing reliance on theories of conceptual-commodity-value-management within post-industrial, post-modern bourgeois-state-capitalism has thrown old class divisions into disarray, due to the fact that increasingly wages have nothing to do with labor-power expenditures and/or socially necessary labor-time. In effect, as long as the capitalism mode of production remains, the introduction of new machinery, technology and/or full automation will only sow the seeds of resentment, alienation and universal nihilism increasingly deeper into the consciousness of the working population because “capital [is]…an alienated social power which has gain an autonomous position [over the working population via machinery] and [now] confronts society as a thing and as a power”, which subjugates everything to its insatiable logic and its mechanical processes. As Marx correctly surmised a long-time ago, albeit somewhat differently, that the ever-increasing “accumulation of wealth at one pole is…at the same time [the ever-increasing] accumulation of misery…slavery, ignorance, brutalization and moral degradation at the opposite pole”. The solution is nothing other than total revolution

"I have no country to fight for; my country is the Earth, and I am a citizen of the World." - Eugene V. Debs

robbo203
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The argument the writer seems to present is that there is a flaw in Marx s thinking.  Increasing automation and the replacement of living labour by dead labour, should have the effect of reducing the value content of commodities  - the amount of socially necessary labour time embodied in them,  This is because only living labour can create new values; machines only transfer the value already contained in them,  So as machines replace human labour, the effect should be a reduction in the value content of commodities,  That in turn should result in a lowering of prices since on average and over the long run commodity prices reflect their values,  That is not happening according to the writer .  Hence the flaw in Marx's theory:

" In fact, increasingly post-industrial, post-modern bourgeois-state-capitalism is abandoning, with the advent of ever-increasing automation, the limited parameters manufactured by socially necessary labor-time in favor of the unlimited parameters manufactured by conceptual-commodity-value-management, namely, arbitrary, socially constructed value, price and wage-determinations. "

 

The writer states that Marx acknowleged that some forms of valuation can take a money form without any labour content being involved e.g honour or prestige  but felt that this was the exception to the rule of commodity production.  According to Michel Luc Bellemare, however,  this kind of arbitrary valuation has now become the rule rather than the exception

 

Moreover;

"Notwithstanding, returning to our analysis of the falling rate of profit, whenever the profit rate falls, an arbitrary/artificial application of the price-form/money-form can be applied, in order to avert profit rate decline indefinitely. One such example, straight out of Marx, is his idea that in order to rectify and/or avert a fall in the rate of profit, capital resorts to devaluation in order to overcome the falling rate of profit. Devaluation is an arbitrary/artificial application of the price-form/money-form in an effort to re-evaluate/re-price constant-capital according to a subjective and/or arbitrary standard that has nothing to do with the real, actual value embodied in the elements of constant capital; i.e., building, machinery, raw materials etc"

 

Ths sounds to me almost like a kind of left wing anarchist version of the subjective theory of value endorsed by mainstream economists, Its equivalent to the idea proposed by currency crank theorists that banks can create money out of thin air,  If that was the case no bank need ever go bankrupt.   The example of capital devaluation to counteract the falling rate of profit  is misconstrued/ misunderstood because it is not considerd within the dynamc context of changing market conditions i.e the capitalist trade cycle.  The capital may be devalued now at a time of economic recession but as market conditions pick up it will be revalued accordingly

 

The counterargument I would put is that ultimately this "arbitrary price form" that  Michel Luc Bellemare refers to, which he caims is now dominant, has to be derivative from the normal commodity price form based on socially necesary labour time.  You cant just conjure a price out of thin air.  The price of the good you want to sell has to adjust to the market conditions and therefore the purchasing power of your customers which in  the case of workers is based on their wage income .i.e employment.  Market competition ensure this if nothing else.

 

Also, the writer seems to overestimate the extent to which dead labour has replaced living labour i.e. technological unemployment - partly because he is overestimating the extent of the productivity gains by looking at only one small segment of the process of socialised production immediately affected by automation .  I  find this argument  about automation bringing about mass unemployment a little puzzling because we have had a  continuous process of new technologies being introduced yet employment levels have risen to record levels,  Moreover , in the USA there was a siginificant increase in the legnth of the working day  in recent decades (see for example  http://www.nytimes.com/books/business/9806schor-overworked.html)

 

Something does not quite add up about this whole argument pesented by Michel Luc Bellemare  and I am not convinced

robbo203
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robbo203 wrote:

The argument the writer seems to present is that there is a flaw in Marx s thinking.  Increasing automation and the replacement of living labour by dead labour, should have the effect of reducing the value content of commodities  - the amount of socially necessary labour time embodied in them,  This is because only living labour can create new values; machines only transfer the value already contained in them,  So as machines replace human labour, the effect should be a reduction in the value content of commodities,  That in turn should result in a lowering of prices since on average and over the long run commodity prices reflect their values,  That is not happening according to the writer .  Hence the flaw in Marx's theory:

" In fact, increasingly post-industrial, post-modern bourgeois-state-capitalism is abandoning, with the advent of ever-increasing automation, the limited parameters manufactured by socially necessary labor-time in favor of the unlimited parameters manufactured by conceptual-commodity-value-management, namely, arbitrary, socially constructed value, price and wage-determinations. "

 

 

A further thought occured to me.   Michel Luc Bellemare bases his whole argument - that the labour theory of value  is being rendered increasingly irrelevant by a process of arbitrary valuation -  on the grounds that automation is reducing the value content of commidities but the prices of commodities are steadily rising,  If value ultimately determines prices this shouldnt be happening.  Prices should fall along with value,

 

Here is where he explains this: 

 

This is the reason why value and surplus value can be progressively decreasing within post-industrial, post-modern bourgeois-state-capitalism, with less and less value being spread unto commodities, while commodity-prices simultaneously are ever-increasing.

 

Two quick points :

 

Firstly , presumably he is not taking into account the effect of inflation which would obviously distort the picture.  What we need to know ifs the movement of real prices not inflated prices caused by monetary policy

 

Secondly, the prices of numerous commidiities  have indeed been falling along with technological innovation.  I'm reading through Paul Mason's book on Postcapitalism at the moment and he cites several examples particularly in the area of information technology.  The whole argument about capitalism's supposed trend towards  zero marginal cost promoted by people like Mason and Jeremy Rifkin is actually quite a striking confirmation of the labour theory of value and Mason goes out of his way to point this out

Dave B
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p

 

Off the top of my head?

 

If productivity increased say by 10% per anum you would expect the labour value of products  to decrease by 10%.

 

However is paper money was actually inflating at 10% you would see no paper money fall in prices.

 

If wages denominated in paper money stayed the same then you see nothing changing at all and no evidence anywhere of any changes in prices.

 

What would be happening would be the value benefits in  increase in productivity would be going to either or both to directly the manufacturing capitalist class in increase rate of surplus value and offsetting to some degree the fall in the rate of profit etc.

 

Or to the owners of the paper money mines.

 

 

Despite the problems with the metric of Gross domestic product and what it means.

 

You might be able to assess the likelihood of this thesis by at least a trend analysis of wages as a % of GDP falling.

 

Which it appears to be doing.

 

And static living standards on a use value metric.

Steve-SanFranci...
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robbo203 wrote:

The counterargument I would put is that ultimately this "arbitrary price form" that  Michel Luc Bellemare refers to, which he caims is now dominant, has to be derivative from the normal commodity price form based on socially necesary labour time.  You cant just conjure a price out of thin air.  The price of the good you want to sell has to adjust to the market conditions and therefore the purchasing power of your customers which in  the case of workers is based on their wage income .i.e employment.  Market competition ensure this if nothing else.

It souinds like your describing my conception of hourCoin digital currency when you talk about an  "an arbitrary price form".  When using hourCoin digital currency in a dual currency economy, market forces and profit seeking encourage a clear representation in the price tag of both the capital cost and the human labor cost as seperate items.  So a price tag in a dual currency society would look like "1 hour of your personal time + 4 pieces of gold"  The gold wouild be for the capital cost and the hour would be for the human value added.  Also, the price setting is freely determined and the seller could change the price to say "2 hours of your personal time + 2 pieces of gold" for example, but because of the economics profit seeking, the seller would quickly learn to make the most profit by accurately separating the price into the capital cost and the human value costs.  

I would share more, but I think some of the people here have closed their eyes and shut their mind and reject new ideas so no point in trying to thwart their desire for censorship.

DJP
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Ok. I've spent 3000 hours of my personal time making a cheese and onion sandwich. Plesumably with these I'm now entitled to a Porsche with these hourCoins, please send me some.

alanjjohnstone
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Michel Luc Bellemare, the author,  has responded to this thread in a lengthy article

http://dissidentvoice.org/2017/08/the-foundation-of-structural-anarchism-and-structural-anarchism-economics/

Once more, i bow to my comrades better knowledge of Marxist economics to understand what he is explaining and how it relates to our own positions. Wher do we agree or disagree?

(we can thank him for his helpful link to the forum)

"I have no country to fight for; my country is the Earth, and I am a citizen of the World." - Eugene V. Debs

twc
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Michel Luc Bellemare Ph.d wrote:
Consequently, in the end, it is the ruling enterprising-networks of capitalism that, arbitrarily, establish values [sic], prices and wages.
“Consequently, in the end,” it is Michel Luc Bellemare Ph.d who proves Structural-Anarchism Economics is currency crank economics in which value not only “can be created” — as the mere average run-of-the-mill currency crank asserts— but “actually is created”, arbitrarily, by the “ruling enterprising-networks of capitalism” — e.g., the central banks!

robbo203
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I have looked at Michel Luc Bellamare retort to the discussion on this subject on this forum,  Here are a few thoughts of mine in response.  Michel's comments are in bold

 

First and foremost, for structural-anarchism, value is not created out of thin-air. It is created via a ruling ideational comprehensive framework, namely, when an idea and/or activity, emanating from conceptual-perception and/or physical exertion, is validated by the ruling ideational comprehensive framework of a socio-economic formation as having value, specifically, as having a specific number value, which is agreed upon by the governing representative-agents of the ruling ideational comprehensive framework, and later grudgingly accepted by the masses. In our current, capitalist socio-economic formation, it is the logic of capitalism, expressed through various governing entities, human or otherwise, that predominantly determines and allots specific numerical values to things, services and/or manufactured images

 

 

I am still not quite sure that the writer means by all this. Yes, there is an “ideational aspect” to the process of assigning numerical values – prices - to “things, services and/or manufactured images”.  Entrepreneurs settle on a price for a particular good which they bring to the market, which price they believe will be low enough to enable the commodity to be sold while at the same time high enough to enable them to make a profit. What price they settle on will be based on informed guesswork – not scientific certainty – since they cannot be certain how the market will respond.  That involves having to “think” about what ought to be the appropriate price and amongst other things it involves looking at what other entrepreneur capitalists are selling their commodities for.  If you pitch your price too high you will lose out to your competitors. Of course, you might try to get round this through product differentiation, by suggesting that your particular product has some particular ingredient or quality which your competitors’ products lack. This also requires “thought” - ideas

 

 

However, this idea that a “specific number value” is agreed upon by the “governing representative-agents of the ruling ideational comprehensive framework, and later grudgingly accepted by the masses” seems to imply that price makers are a monolithic body and that price takers are likewise a monolithic body that “grudgingly” go along with whatever numerical value the former determine should be the case and never engage in such subversive activities as switching brand loyalties.  But capitalist entrepreneurs are not liberty to assign whatever price they chose to the product they are trying to sell - except perhaps in the rare instances of monopoly situations and, even then, there will be other constraints that will be brought to bear on them (originating notably from the capitalist state which is concerned with the interests of the capitalist as a whole including those capitalists that would have to bear the costs of these higher prices). Prices are in other words emergent properties resulting from the interactions of multiple agents

 

 

Scientifically quantifiable labor-time, which is so central to any Marxist analysis, is only one possible avenue for determining value, price and wage, namely, it is only one consideration among many, when ruling enterprising-networks have consolidated their governing power over a specific sphere of production. It is in this regard that, contrary to Marx’s estimations, production costs can steadily decrease across a sphere of production while prices steadily increase across a sphere of production.

 

 

Again I am not absolutely certain what the writer is saying here.  If you define value as socially necessary labour time then you can’t have different avenues for the determination of value where only one of these is “Scientifically quantifiable labor-time”.  What the writer is doing is mixing up qualitatively different concepts of value.

 

Moreover, he seems to be unaware of the basic Marxian axiom that the sum total of prices must equate with the sum total of values, however much individual prices may diverge from individual values.  To the extent that some commodities sell for a price above their value that necessarily means other commodities sell for a price below their value.  Production costs also involve prices – namely the price of the inputs required to produce the goods in question (including of course labour power).  Why one set of prices should steadily decrease and another set of prices should steadily increase is not explained

 

 

 

For Marx, numerical value-sums, price-sums and wage-sums are the product of scientifically, quantifiable, expenditures of labor-time, there is no ideological influence involved in value, price and wage-determinations. For Marx, values, prices and wages are completely independent of ideology. Everything for Marx depends on socially necessary labor-time and scientifically quantifiable expenditures of labor-power within the capitalist production process

 

I question this statement on several grounds. I would say that the value content of particular commodities – in the Marxian sense of value – is not something that can be directly measured with a stop watch but only reveals itself in a post hoc sense in market exchange - in exchange value, in the ratios in which commodities exchange and even then only in a general sense,  You cannot say, for example, that because a particular pair of shoes sells for the same price as ten pairs of socks, that the value content of that pairs of shoes is literally tens greater than a pair of socks.  Other factors beside value influence price – namely supply and demand - as Marx pointed out.  The Marxian labour theory of value is a rationalist and deductive one and though there have been various attempts to measure value in the Marxian sense, these can only ever be rough approximations

 

 

I would also question the claim that for Marx there is “no ideological influence involved in value, price and wage-determinations”. There is one case in which Marx clearly envisaged a role for ideological influence to have a bearing on the determination of value – namely labour power itself Labour power is different from other commodities as Marx points out in chapter 6 of Capital vol 1:

 

 :On the other hand, the number and extent of his so-called necessary wants, as also the modes of satisfying them, are themselves the product of historical development, and depend therefore to a great extent on the degree of civilisation of a country, more particularly on the conditions under which, and consequently on the habits and degree of comfort in which, the class of free labourers has been formed.In contradistinction therefore to the case of other commodities, there enters into the determination of the value of labour-power a historical and moral element. Nevertheless, in a given country, at a given period, the average quantity of the means of subsistence necessary for the labourer is practically known.

 

 

 

 

 

In fact, it is those capitalist-networks, capable of controlling specific spheres of production, which are able to establish arbitrary values, prices and wages, that is, values, prices and wages which have nothing to do with actual expenditures of socially necessary labor-time and/or scientifically measurable quantities of labor-power, and everything to do with power and an entities control over a specific commodity and/or sphere of production.

 

Once again, we find here the writer jumbling different conceptions of values.  If he is talking about establishing arbitrary values etc. which “have nothing to do with actual expenditures of socially necessary labor-time”, then clearly he is not using value in the sense that Marx uses this term.  He is actually advancing a subjective theory of value in my opinion and as such his argument is subject to the same devastating criticism that can directed at the subjectivist school of thought such as that it is based on a circular reasoning

 

Moreover to say that prices and wages have “nothing to do” with actual expenditures of socially necessary labor-time is way over the top.  Nothing to do at all? That’s absurd! Granted the prices of commodities don’t, and cannot, exactly correspond with their value content but there is surely a rough correspondence here.  Why would a Rayleigh bicycle consistently sell at a price below that of a Ford Escort?  Answer: because their values are markedly different, amongst other things

 

 

 

 

 

It is in this regard that APPLE Inc. can grind wages down in China to almost nil, while charging ever-increasing sums for products in North America and Europe, where production costs are relatively minor and/or miniscule in comparison to commodity-prices and profits

 

 

If production costs in North America and Europe are “relatively minor and/or miniscule in comparison to commodity-prices and profits” why would business corporations bother to relocate their operations to low wage economies? As for Apple Inc grinding down wages to “almost nil” in China, what we have seen in China is a rise in wages in recent years and relatedly, a switch to more capital intensive production.  It is no coincidence that China is a major centre for developments such as robotics.  China used to be a low wage economy based on abundant supplies of labour.  This is what attracted the capital that financed China’s spectacular growth.  But in the race to the bottom other countries like Vietnam or Cambodia have overtaken China as low wage economies attracting inward investment from the Multinationals

 

 

 

It has been argued that inflation/deflation have a part to play in all of these seeming arbitrary value, price and wage-determinations and fluctuations, but for structural-anarchism economics, the effect of inflation/deflation are simply a by-product and/or an effect of the practical applications of conceptual-commodity-value-management. That is, inflation/deflation are effects of the artificial fabrication of arbitrary values, prices and wages by ruling enterprising-networks and not the other way around

 

The writer has based his argument on the fact that there has been a steady increase in prices because of some arbitrary determination of values whereas I have pointed out that this could at least in part be the consequence of inflationary policies – increasing the currency in circulation.  Now we are told that this inflation is the effect of this “artificial fabrication of arbitrary values, prices and wages by ruling enterprising-networks and not the other way around”.  I don’t get this at all. Am I reading this right or is what is being suggested here is that prices rise because the powers-that-be desire it, that they attach more value to commodities being sold?  If so why would not the producers of production goods, the inputs of the final goods producing sector not also want to see an upward re-evaluation of their goods?  This is odd because the whole argument presented by the writer seems to be based on the alleged widening chasm between the prices of commodities and the costs of production

 

 

For example, a Black Friday Fire Sale, which is a deflationary microeconomic situation, is not the product of autonomous, law-like, market mechanisms. It is a conscious decision by an enterprise of some sort to artificially lower its commodity-prices, thus manifesting a microscopic deflationary situation, whereupon, through the practical application of conceptual-commodity-value-management, purchasing power is significantly increased for consumers temporarily, resulting in a mad rush and/or a purchasing frenzy. Inversely, when prices are manually increased after the Black Friday Fire Sale to their former levels or higher, thus setting the stage for next year’s anticipated Black Friday Fire Sale, an inflationary microeconomic situation is manufactured, whereupon, consumers shy away from purchases, due to their artificially decreased purchasing power

 

But if consumers shy away from purchases then this rather defeats the whole purpose of the exercise, doesn’t it?  In fact what you would find is other businesses jumping at the opportunity to increase their market share by underselling their competitors. Hence the periodic price wars between the big supermarkets.

 

 

 

Consequently, from the Marxist perspective, value is something definite and scientifically quantifiable. It is something that can be scientifically measured in the sense that one can measure the exact labor-time socially necessary to manufacture a particular commodity. And for Marx, this scientifically measured labor-time, embodied in a commodity, is the basis of value; i.e., it is value, itself. And being true to the scientific method, for Marx, value, which cannot be neatly translated into quantifiable labor-time; i.e., exact temporal units of labor-power, or specifically, a scientifically determined socially necessary labor-time, which governs a specific economic branch, is in the end not value, it is unproductive

 

Again I don’t think you can “measure the exact labor-time socially necessary to manufacture a particular commodity” because socially necessary labour time is an industry wide average, generalisation.  It’s like saying the average family consists of 2.3 children.  No such actual family exists

 

 

Producing more cheaply means the ability to sell more cheaply and this also means the capacity to sell more goods and to appropriate a greater segment of the market, and “if [the capitalist] attains the object he is aiming at…[and] prices his goods only a small percentage lower than his competitors. He drives them [i.e. his competitors,] off the field, he wrests from them at least a part of their market, by underselling them”.10  In this regard, according to Marx, competition drives capitalists to ever-increasingly produce below the average production time limit set by the regulating mechanism of socially necessary labor-time.

 

 

Yes and selling more cheaply as a condition of competition itself, is a countervailing influence against the desire to just arbitrarily raise prices because you have revaluated upwards the worth of the commodity you are selling

Notwithstanding, this Marxist concept of a law-like mechanism; i.e., socially necessary labor-time, regulating capitalist production, is predicated on the assumption that value, by Marx’s own definition, is only scientifically quantifiable labor-time and nothing else. For Marx, “the substance of value [is] labor-time”11, specifically socially necessary labor-time, measured in scientifically exact quantities of time deemed socially necessary, pertaining to a specific sphere of production.  However, is Marx correct in his definition? Or has he missed the amplitude, multitude and magnitude of value; namely, has Marx reduced the concept of value to the narrow confines of scientific measurement and by doing so, missed the importance, malleability and fluidity by which multi-dimensional value, informs, shapes and influences price, wage, profit, production, consumption,  distribution and capitalism, in general, etc.

 

 

 

This is somewhat misleading.  Marx does allow a role for use value. In fact a commodity that possessed no use value would not be sold.  The desirability of a commodity to a consumer will therefore influence its price through the interaction of supply and demand.  However in the long run – but only in the long run - there will be a tendency for supply and demand to equilibrate.  At that point, use value only explains why commodities exchange not the ratios in which they exchange.  As Marx notes:  If supply equals demand, they cease to act, and for this very reason commodities are sold at their market-values. Whenever two forces operate equally in opposite directions, they balance one another, exert no outside influence, and any phenomena taking place in these circumstances must be explained by causes other than the effect of these two forces. If supply and demand balance one another, they cease to explain anything, do not affect market-values, and therefore leave us so much more in the dark about the reasons why the market-value is expressed in just this sum of money and no other (CapitalVol 3 part 2, ch 10)

 

 

 

alanjjohnstone
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That's quite a detailed response, Robbo. It is a pity the author has not engaged directly on the forum to answer your queries about what he is actually meaning in places.

Hopefully, he will discover this thread the same way as he did previously and this time answer the criticisms and i am sure it will lead to further clarification. I hope it can be accomplished in a comradely exchange.

your comments have been very helpful.

"I have no country to fight for; my country is the Earth, and I am a citizen of the World." - Eugene V. Debs

Marcos
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The main purpose of all these innovative economists and critiquers is to discret Marx's analysis of capitalism. There is not any flaw on Marx conception of automation, and there is not flaw on volume 2 and 3. Rosa Luxembourg tried to question it in regard to what Engels did with volume 2 and 3 and she fell in her own trap.

 

 

 

 

 

 

 

 

 

 

 

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