Seventeen Contradictions and the End of Capitalism (16 page)

4. Finance and money form a crucial domain for the functioning of capital (see
Contradiction 2
). It is only in money terms that profits and losses can be exactly calculated and it is in money terms that most economic decisions are made. While the technologies of money remained fairly constant over long historical periods of time, there is no question that innovation in this domain picked up remarkably from the 1930s onwards. In recent years innovations in finance and banking have shown a tendency to explode into exponential growth with the advent of computerisation, electronic moneys and banking,
and a proliferation of a whole new range of investment vehicles. The trend to create fictitious capitals that circulate freely has accelerated remarkably alongside all manner of predatory practices within the credit system that have contributed to a wave of accumulation by dispossession and speculation in asset values. Nowhere else do we see so dramatically the acute interaction between new hardware possibilities, the creation of new organisational forms (private equity firms and hedge funds and a host of complicated state regulatory agencies) and, of course, an astonishing rate of software development. The technologies of the world’s monetary and financial system are an acute source of stress at the same time as they are a field of capitalist endeavour unsurpassed in these times in importance and in ‘messy vitality’.

5. Finally, there is the question of work and labour control. This is a crucial arena for capital and I will take it up in detail shortly.

Did technologies have to evolve in the way they did? There clearly were choices made that liberated technological innovation from the kinds of constraints that had inhibited the deployment of new technologies in earlier places and times (the failure to deploy technological discoveries in China being the most conspicuous example). And there have certainly been examples of intense resistance to new technological configurations on moral and ethical grounds, everything from the struggle of the Luddites against the introduction of machines to the revolt of the physicists against the possibility of nuclear weapons. Current controversies rage over the ethics and inadvisability of genetic engineering and genetically modified foods. Such questions, however, do not seem to deter the evolutionary trajectory of technological change. This is why I designate this kind of contradiction as ‘moving’ – it is not stable or permanent but perpetually changing its spots. For this reason it becomes crucial to evaluate where the processes of technological change are at right now and where they might move to in the future.

Arthur asks, for example, ‘Could this process of constant evolution of technology and remaking of the economy ever come to a halt?’ His answer is yes in principle. But the actual prospects for a halt
are exceedingly remote. The decentralised dynamic of technological evolution is too strong and the field of possible discoveries of the perpetual novelty in nature far too wide for any halt to technological and economic evolution to occur in the immediate future.

The pipeline of technologies coming in the next decade is reasonably predictable. And current technologies have future improvement paths that will be followed more or less predictably. But overall, just as the collection of biological species in the far future is not predictable from the current collection, the collective of technology in the economic future is not predictable. Not only can we not forecast which combinations will be made, we also cannot forecast which opportunity niches will be created. And because potential combinations grow exponentially, this indeterminacy increases as the collective develops. Where three thousand years ago we could say with confidence that the technologies used a hundred years hence would resemble those currently in place, now we can barely predict the shape of technology fifty years ahead.
⁸

So where, in this process of ‘combinatorial evolution’, lies
the
contradiction or contradictions that might threaten profitability and endless capital accumulation? There are, I want to suggest, two contradictions of huge import for the future prospects of capital. The first concerns technology’s dynamic relation to nature. This will be the subject of
Contradiction 16
. The second concerns the relationship between technological change, the future of work and the role of labour in relation to capital. This is the contradiction we will examine here.

Control over the labour process and the labourer has always been central to capital’s ability to sustain profitability and capital accumulation. Throughout its history, capital has invented, innovated and adopted technological forms whose dominant aim has been to enhance capital’s control over labour in both the labour process and the labour market. This attempted control encompasses not
only physical efficiency but also the self-discipline of the labourers employed, the qualities of labour supplied in the marketplace, the cultural habits and mentalities of workers in relationship to the work they are expected to do and the wages they expect to receive.

Many industrial innovators have had labour control as their primary goal. A Second Empire French industrialist renowned for his innovations in the machine-tool industry openly proclaimed that his three goals were increasing precision in the labour process, increasing productivity and disempowering the worker. It is for this reason, doubtless, that Marx argued that technological innovation was a crucial weapon in class struggle and that many an innovation had been adopted by capital with the sole aim of breaking strikes. There certainly arose with this the fetish belief on the part of capital that the solution to ever-increasing profitability was endless technological innovation directed towards the disciplining and disempowerment of the worker. The factory system, Taylorism (with its attempted reduction of the worker to the status of a ‘trained gorilla’), automation, robotisation and the ultimate displacement of living labour altogether respond to this desire. Robots do not (except in science fiction accounts) complain, answer back, sue, get sick, go slow, lose concentration, go on strike, demand more wages, worry about work conditions, want tea breaks or simply refuse to show up.

Capital’s fantasy of total control over labour and the labourer has its roots in material circumstances, most particularly in the dynamics of class struggle in all of its manifestations both within and outside of the production process. The role of technologically induced unemployment in regulating the wage rate, the pursuit of ever-cheaper goods for the sustenance of the labour force (the Walmart phenomenon) to make lower wages more acceptable, the assault upon any hint of a basic social wage as encouraging idleness on the part of labour and the like form a domain of class struggle where technological interventions and mediations become crucial. This is what makes Arthur’s presentation so strange, because never once do these elementary and obvious historical facts (satirised so wonderfully in Charlie Chaplin’s
Modern Times
) enter into his account of the
combinatorial evolution that does indeed play such a critical role in the details of technological change.

So here is the central contradiction: if social labour is the ultimate source of value and profit, then replacing it with machines or robotic labour makes no sense, either politically or economically. But we can see all too clearly what the mechanism is that heightens this contradiction to the point of crisis. Individual entrepreneurs or corporations see labour-saving innovation as critical to their profitability vis-à-vis competitors. This collectively undermines the possibility of profit.

In a recent book Martin Ford shapes an argument around exactly this problem. As the cutting edge of technological dynamism shifts from mechanical and biological systems to artificial intelligence, so we will see, he argues, a huge impact upon job availability not only in manufacturing and agriculture but also in services and even in the professions. Aggregate demand for goods and services will consequently collapse as jobs and incomes disappear. This will have catastrophic effects upon the economy unless some way is found for the state to intervene with targeted redistributive stimulus payments to those large segments of the population that have become redundant and disposable.

André Gorz had earlier made exactly this same argument though from a different political perspective:

Micro-economic logic would want these savings in working time to be translated into savings in wages for those companies where such economies are achieved: producing at lower costs, these companies will be more ‘competitive’ and will be able (in certain conditions) to sell more. But from the macro-economic point of view, an economy which, because it uses less and less labour, distributes less and less wages, inexorably descends the slippery slope of unemployment and pauperization. To restrain its slide, the purchasing power of households has to cease to depend on the volume of work which the economy consumes. Though they perform a decreasing number of hours of work, the population has
to earn the wherewithal to purchase a growing volume of goods produced: the shortening of working time must not bring about a reduction in purchasing power.
⁹

The details that Ford cites to back up his general claim are impressive. There is clear empirical evidence of inexorable exponential growth of computer capacity and speed. This has roughly doubled every two years over the last three decades or so. The growth of this computer capacity does not depend on the construction of a technology that has the ability to think as we do. It arises out of the fact that the computer is ‘unimaginatively fast’, and getting faster and faster all the time. Speed-up has always been, as we have seen, a crucial aim of technological innovation in relation to capital and the world of computers is no exception. As a result of the exponential growth in computer power, ‘entire traditional job categories are at risk of being heavily automated in the not too distant future’. The idea that the new technologies will create jobs at a pace to compensate for these losses ‘is pure fantasy’. Furthermore, the idea that it will only be the low-paying routine jobs that will be eliminated and not high-paying skilled jobs (radiologists, doctors, university professors, airline pilots and the like) is misguided. ‘In the future, automation will fall heavily on knowledge workers and in particular on highly paid workers.’ Ford concludes: ‘Allowing these jobs to be eliminated by the millions, without any concrete plan to handle the issues that will result, is a clear recipe for disaster.’
¹⁰

But what sort of disaster are we looking at? Larger and larger segments of the world’s population will be considered redundant and disposable as productive workers from the standpoint of capital and will have a hard time surviving both materially and psychologically. Alienated from any prospect of a meaningful existence in the realm of necessary labour as defined by capital, they will have to look elsewhere to construct a meaningful life. On the other hand, output will be increasing, but where will the corresponding increase in demand come from? This is what bothers Ford most of all:

Who
is going to step forward and purchase all this increased output? … automation stands poised to fall across the board – on nearly every industry, on a wide range of occupations, and on workers with graduate degrees as well as on those without high school diplomas. Automation will come to the developed nations and to the developing ones. The consumers that drive our markets are virtually all people who either have a job or depend on someone who has a job. When a substantial fraction of these people are no longer employed, where will market demand come from?
¹¹

This is a typical Keynesian-style question of demand management and it threatens a crisis for capital of the sort that racked the global economy in the 1930s. What happens when we restate Ford’s claims against the background of the contradictory unity between production and realisation? Marx interestingly identifies a similar difficulty, but he does so from the perspective of production. As more and more labour-saving devices are applied, so the value-producing agent – social labour – tends to decline quantitatively, ultimately destroying socially necessary labour and the production of value and with it the basis of profitability. The same result arises from both sides of the contradictory unity between production and realisation. Profitability erodes and endless capital accumulation collapses in both cases. Ford in an appendix recognises that there may be some sort of broad similarity between his argument and that of Marx, but he does not understand what it is and is, of course, at pains to distance himself from the damaging consequences of any such association. But the potential range of counteracting forces and solutions looks very different from the two perspectives within the contradictory unity.

Ford, for example, is desperately concerned to save capital from succumbing to the potential disaster that looms. He actually favours the spread of consumerism (no matter how mindless and alienating) to absorb the ever-cheapening products that a wholly automated capital can produce. He seeks to square the circle of supply and demand disparities by creating a state-mandated tax system to recuperate the productivity gains created by the new technologies. These
funds are then redistributed as purchasing power to the dispossessed masses on an incentivised basis. In return for the funds people are expected to commit to creative or worthy social activities and contribute to the common good. Programmes of this sort already exist. The poverty grants in Argentina and Brazil redistribute money to poor families provided that they can prove that their children are attending school. Structuring such incentivised redistributions effectively may be difficult, but in Ford’s view it is critical to avoid the culture of dependency that is often associated with straight welfare payments or a straight guaranteed income no matter whether one works or not. Nevertheless, redistributions and the creation of purchasing power are the only means to create sufficient demand to match the ever-increasing supply of goods and services. This is, concurs André Gorz, ‘the only way of giving meaning to the decrease in the volume of socially necessary work’.
¹²