Socialist Studies Socialist Studies

The Demons of Invention

One of the most distinctive features of capitalism is one which Marx and Engels noted in The Communist manifesto, back in 1848. That is its restless questing and inventiveness:

Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones.

The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere...

.. All old-established national industries[are] destroyed ... dislodged by new industries ... by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones...


As if to illustrate this point, at the start of the New Year space exploitation achieved two notable firsts. The American NASA’s New Horizons sent back flyby pictures of a very remote space object, Ultima Thule. But this achievement was dwarfed by the Chinese successful soft landing on the dark side of the moon, with a rover and robotic implements, communicating data and pictures back to earth via a ‘halo’ orbiting satellite.

At once the experts commented with excitement that space was now open to becoming industrialised, especially as now several commercial companies are interested.

There has long been talk of colonising Mars, and the geology of the unknown, dark side of the Moon is of real interest. Whenever this sort of excitement is in the air, the next thing is anticipation of ways to exploit the raw materials and natural resources of the planets.

Yet it is only in recent decades that so-called ‘rare earths’ had been found to be of use, e.g. in making ‘smart phones and other digital gadgets. First found in China, these have also been found in quantities in Africa – and the result there seems to be never-ending civil wars.

Consider how recent space exploration has been. The first missile into space was in 1944, and the German engineers were then employed by the US for their new space programme, especially for Cold War missiles. By 1957, the Soviet Union had sent up the first orbiting spacecraft, Sputnik, followed by a dog, and the first astronauts, Yuri Gagarin in 1961 and later Valentina Tereshkova. America sent men to the moon – and of course planted a flag there.

But nationalism seems to evaporate when people are in space and see how beautiful and fragile our little blue planet looks, seen from such a huge distance, where national borders cannot be seen. Later, the International Space Station was established, in orbit, manned by international crews. For once co-operation took the place of international rivalry and enmity. But most space satellites are there for military reasons and purposes.

In the 19th century, capitalism had still not even explored all of planet earth – the first explorers to reach the South Pole only managed this on the eve of the first world war.

By the end of the 20th century, computers, the Internet, and even robotics have all become part of the everyday world – first for advanced research, and now for consumers and even for very young children. With these new technologies, the speeding up of new inventions is growing apace.

But why? “What’s it all about, Alfie?Why is it that, in a capitalist world, everything is forever changing? Why is it that capitalism – unlike previous social systems – is forever discontented, driven as if by demons to drive forward, to seek out and conquer unknown new lands and new worlds? Why is it that homo capitalisticus, not content with trashing planet earth, filling the oceans with plastic, polluting the atmosphere, destroying the habitats of so many species – including that of homo not so sapiens: why is there this frenzied drive to explore and discover, develop and pollute, not just this planet but even far away planets?

In the last issue of SOCIALIST STUDIES we quoted from Marx’s argument that for a capitalist “the restless never-ending process of profit-making is alone what he aims at"(CAPITAL VOL I part 2, chap 4).

But in this passage, like the well-known passage from the COMMUNIST MANIFESTO, Marx is here simply describing how capitalism works.

He is not here explaining why it works and has to work this way, not explaining why it is forever restless, forever innovating, forever destroying the old and discovering the new. But he did address this question and found the answer.

Understanding Exploitation

Marx had worked out that the ‘classical’ economists, from Adam Smith to Ricardo, had failed to see that workers sell not their labour but their labour power – their physical and mental abilities. It is the difference between the value of labour power and the greater value created which is termed surplus value. And it this which is carved up as Rent, Interest and Profit. From all the values created in production, the workers have to support not just their employers but a host of unproductive drones – those involved in wholesale and retail trading, in marketing and advertising and PR, in the political sphere, and to cap it all a royal family.

The commodities produced by workers have values made up in part from the ‘constant capital’ employed, the raw materials, and the wear and tear on premises and machinery; and from the ‘variable capital’ - human labour. This last is the only source from which new value is created in the production process: with the machinery and other overheads, existing value is transferred but not newly created.

Marx’s detailed explanation of this question can be found in CAPITAL VOL III – chapter IX The Formation of a General Rate of Profit... and Transformation of the Values of Cimmodities into Prices of Production.

He pointed out that how values are created varies from one industry or firm to another: some industries and firms are more labour-intensive than others. This difference in the ‘organic composition’ of capital results in differences in the rate of surplus value, the rate of profit, and the rate of exploitation

. If this seems confusing, just remember there are many different ways of calculating how successful a business is. And above all, remember that in a capitalist world, competition is king.

When businesses compete, each seeks to outsell the competition, and above all to sell their commodities at a price which ensures a good profit. That is essential since, only by re-investing in the latest new production processes, in R and D, can they hope to grow their businesses. If they stand still for a moment, their competitors will surely get ahead, and then their business will struggle to attract new capital investment, and sooner or later will go down.

It is one thing to calculate how profitable a production process is in one firm or industry by itself – taking account of the amount of variable capital used and surplus value created in the process. Added together with the constant capital, you can calculate the cost price.

But to sell the commodities produced, these will have to be sold competitively. As a result the cost price has to be adjusted to a market price.

This is done by adding in not the actual surplus value created in each enterprise or industry but the average surplus value in the market conditions of the time. This then gives an average rate of profit.

The result of this is that while some firms will gain – their products will sell at a price above their value – other firms will struggle as their cost price is below their value. The average value and rate of profit has shifted but their costs have not been adjusted, so now these firms are lagging behind. The reason for this is that labour costs only count so far as they represent necessary labour: any ‘above average’ costs are inefficient and uncompetitive. The effect of market competition is to drive down labour costs and drive out of business any uncompetitive laggards.

In Marx’s table he showed how this effect of market competition worked out for capitals with differing organic composition: competition advantaged those capitals where labour-saving technology had speeded up the production process and cut labour costs, and at the same time disadvantaged those firms or industries which for whatever reason had not kept up with the latest technological developments.

The priority for all capitalists is to keep their labour costs as low as possible, hence they are driven constantly to speed up the rate of production. An obvious example is how the highly automated car industry has gone, rom the conveyor-belt assembly-line integrated factory system, to one relying on robots, the complexity of an international supply chain and the computerised ‘efficiencies’ of JIT, the Just in Time deliveries of spare parts from faraway factories.

In all industries there is constant pressure to reduce labour costs by increasing the amount of constant capital. It is the different ratios between constant capital and variable capital, the different organic composition of the capitals employed, that determine whether the costs of production of one enterprise are above or below the average costs compared with the costs of competing producers.

In recent decades, both in Europe and the US, competition and the growth of container ports has led to whole industries being moved to countries with cheaper labour costs, where they can then undercut older industries.

Along with the drive for technological innovation, capitalism also has another basic drive, the drive to cheapen labour costs. To speed up production, you can of course sweat the workforce. Some capitalists have become notorious for this, e.g. Jeff Bezos of Amazon. In Japan workers are still reportedly dying of overwork. In China workers are housed in dormitories, their whole lives controlled by the employers, and only get home to see their families at the New Year. In India and Bangladesh, women and children work in appalling and dangerous conditions.

Capitalism’s capacity for ruthless inhumanity seems as unlimited as its capacity for invention and innovation. The result is the pollution of the planet, the creation of junk food, and innovation being used to deliver bombs - not aid to the starving victims of their endless, pointless wars.

It is surely high time to say R. I. P. – rest in peace! - to this rip-off system, the Rent, Interest and Profit system, based on careless, greedy and irresponsible exploitation of this possibly unique planet, its resources and interdependent ecosphere, and its people.

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