Michael Roberts explains why we would never get to a robotic society under capitalism

In my first post on Robots and AI, I dealt with the impact of these new technologies on future employment and productivity. I raised the contradiction that develops within the capitalist mode of production between increased productivity achieved through new technology and falling profitability.

In this second part, I want to consider the impact of robots and AI seen through the prism of Marx’s law of value under capitalism. There are two key assumptions that Marx makes in order to explain the laws of motion under capitalism: 1) that only human labour creates value and 2) over time, investment by capitalists in technology and means of production will outstrip investment in human labour power – to use Marx’s terminology, there will be a rise in the organic composition of capital over time.

There is no space here to provide the empirical evidence for the latter. But you can find it here (crisis and the law for BOOK1-1).  Marx explained in detail in Capital that a rising organic composition of capital is one of the key features in capitalist accumulation. Investment under capitalism takes place for profit only, not to raise output or productivity as such.  If profit cannot be sufficiently raised through more labour hours (i.e. more workers and longer hours) or by intensifying efforts (speed and efficiency – time and motion), then the productivity of labour (more value per labour hour) can only be increased by better technology.  So, in Marxist terms, the organic composition of capital (the amount of machinery and plant relative to the number of workers) will rise secularly.  Workers can fight to keep as much of the new value that they have created as part of their ‘compensation’ but capitalism will only invest for growth if that wage share does not rise so much that it causes profitability to decline. So capitalist accumulation implies a falling share to labour over time, or what Marx would call a rising rate of exploitation (or surplus value).

The ‘capital-bias’ of technology is something continually ignored by mainstream economics. But as Branco Milanovic has pointed out, even mainstream economic theory could encompass this secular process under capitalist accumulation. As Milanovic puts it:

‘In Marx, the assumption is that more capital intensive processes are always more productive. So capitalists just tend to pile more and more capital and replace labor….. This in Marxist framework means that there are fewer and fewer workers who obviously produce less (absolute) surplus value and this smaller surplus value over an increased mass of capital means that the rate of profit goes down. […] The result is identical if we set this Marxist process in a  neoclassical framework and assume that the elasticity of substitution is less than 1. Then, simply, r shoots down in every successive round of capital-intensive investments until it practically reaches zero. As Marx writes, every individual capitalist has an interest to invest in more capital-intensive processes in order to undersell other capitalists, but when they all do that, the rate of profits decreases for all. They thus work ultimately to drive themselves “out of business” (more exactly they drive themselves to a zero rate of profit).’

Milanovic then considers the robot technology: “Net income, in Marxist equilibrium, will be low because only labor produces “new value” and since very few workers will be employed, “new value” will be low (regardless of how high capitalists try to drive the rate of surplus value). To visualize Marxist equilibrium, imagine thousands of robots working in a big factory with only one worker checking them out, and with the useful life of robots being one year so that you keep on replacing robots continuously and thus run enormous depreciation and reinvestment costs every year. The composition of GDP would be very interesting. If total GDP is 100, we could have consumption=5, net investment=5 and depreciation=90. You would live in a country with GDP per capita of $500,000 but $450,000 of that would be depreciation.”

This poses the key contradiction of capitalist production: rising productivity leads to falling profitability, which periodically stops production and productivity growth.  But what does this all mean if we enter the extreme (science fiction?) future where robotic technology and AI leads to robots making robots AND robots extracting raw materials and making everything AND carrying out all personal and public services so that human labour is no longer required for ANY task of production at all?

Let’s imagine a totally automated process where no human existed in the production. Surely, value has been added by the conversion of raw materials into goods without humans? Surely, that refutes Marx’s claim that only human labour can create value?

But this confuses the dual nature of value under capitalism: use value and exchange value. There is use value (things and services that people need); and exchange value (the value measured in labour time and appropriated from human labour by the owners of capital and realised by sale on the market). In every commodity under the capitalist mode of production, there is both use value and exchange value. You can’t have one without the other under capitalism. But the latter rules the capitalist investment and production process, not the former.

Value (as defined) is specific to capitalism. Sure, living labour can create things and do services (use values). But value is the substance of the capitalist mode of producing things. Capital (the owners) controls the means of production created by labour and will only put them to use in order to appropriate value created by labour. Capital does not create value itself.

But in our hypothetical all-encompassing robot/AI world, productivity (of use values) would tend to infinity while profitability (surplus value to capital value) would tend to zero. Human labour would no longer be employed and exploited by Capital (owners). Instead, robots would do all. This is no longer capitalism. I think the analogy is more with a slave economy as in ancient Rome.

In ancient Rome, over hundreds of years, the formerly predominantly small-holding peasant economy was replaced by slaves in mining, farming and all sorts of other tasks. This happened because the booty of the successful wars that the Roman republic and empire conducted included a mass supply of slave labour. The cost to the slave owners of these slaves was incredibly cheap (to begin with) compared with employing free labour. The slave owners drove the farmers off their land through of a combination of debt demands, requisition in wars and sheer violence. The former peasants and their families were forced into slavery themselves or into the cities, where they scraped a living with menial tasks and skills or begged. The class struggle did not end. The struggle was between the slave-owning aristocrats and the slaves and between the aristocrats and the atomised plebs in the cities.

A modern science fiction can be found the recent Elysium movie. In this movie, the owners of the robots and modern technology have built themselves a complete space planet separate from the earth. There they live a life of luxury off the things and services provided by robots and defend their separated lives with their robot armies. The rest of the human race lives on earth in a dire state of poverty, disease and misery – an immiseration of the working class who no longer work for a living.

In the Elysium world, the question would remain: who owns the means of production? In the completely automated planet, how would the goods and services produced by the robots be distributed in order to be consumed? That would depend on who owns the robots, the means of production. Suppose there are 100 lucky guys on the robot-run planet. One of them may own the best robots and so appropriate the whole product. Why should he share it with the other 99? They will be sent back to the Earth. Or they might not like it and will fight for the appropriation of some of the robots. And so, as Marx put it once, the whole shit begins again, but with a difference.

All will depend on how humanity would get to a completely automated society. On the basis of a socialist revolution and common ownership, the distribution of the output produced by the robots can be controlled and distributed to each according to his/her needs. If society operates on the basis of a continuation of the private ownership of the robots, then the class struggle for the control of the surplus continues.

The question often posed at this point is: who are the owners of the robots and their products and services going to sell to make a profit? If workers are not working and receiving no income, then surely there is massive overproduction and underconsumption? So, in the last analysis, it is the underconsumption of the masses that brings capitalism down?

Again, I think this is a misunderstanding. Such a robot economy is not capitalist any more; it is more like a slave economy.  The owners of the means of production (robots) now have a super-abundant economy of things and services at zero cost (robots making robots making robots).  The owners can just consume.  They don’t need to make ‘a profit’, just as the aristocrat slave owners in Rome just consumed and did not run businesses to make a profit.  This does not deliver an overproduction crisis in the capitalist sense (relative to profit) nor ‘underconsumption’ (lack of purchasing power or effective demand for goods on a market), except in the physical sense of poverty.

Mainstream economics continues to see the rise of the robots under capitalism as creating a crisis of underconsumption. As Jeffrey Sachs put it: ‘Where I see the problem on a generalised level for society as a whole is if humans are made redundant on an industrial scale (47% quoted in US) then where’s the market for the goods?’ Or as Martin Ford puts it: ‘there is no way to envision how the private sector can solve this problem.  There is simply no real alternative except for the government to provide some type of income mechanism for consumers.’ Ford does not propose socialism, of course, but merely a mechanism to redirect lost wages back to ‘consumers’, but such a scheme would threaten private property and profit.

A robotic economy could mean a super-abundant world for all (post-capitalism as Paul Mason suggests); or it could mean Elysium. FT columnist Martin Wolf put it this way:

‘The rise of intelligent machines is a moment in history. It will change many things, including our economy. But their potential is clear: they will make it possible for human beings to live far better lives. Whether they end up doing so depends on how the gains are produced and distributed. It is possible that the ultimate result will be a tiny minority of huge winners and a vast number of losers. But such an outcome would be a choice not a destiny. A form of techno-feudalism is unnecessary. Above all, technology itself does not dictate the outcomes. Economic and political institutions do. If the ones we have do not give the results we want, we must change them.’

It’s a social ‘choice’ or more accurately, it depends of the outcome of the class struggle under capitalism.

John Lanchester is much more to the point:

‘It’s also worth noting what isn’t being said about this robotified future. The scenario we’re given – the one being made to feel inevitable – is of a hyper-capitalist dystopia. There’s capital, doing better than ever; the robots, doing all the work; and the great mass of humanity, doing not much, but having fun playing with its gadgets…There is a possible alternative, however, in which ownership and control of robots is disconnected from capital in its current form. The robots liberate most of humanity from work, and everybody benefits from the proceeds: we don’t have to work in factories or go down mines or clean toilets or drive long-distance lorries, but we can choreograph and weave and garden and tell stories and invent things and set about creating a new universe of wants. This would be the world of unlimited wants described by economics, but with a distinction between the wants satisfied by humans and the work done by our machines. It seems to me that the only way that world would work is with alternative forms of ownership. The reason, the only reason, for thinking this better world is possible is that the dystopian future of capitalism-plus-robots may prove just too grim to be politically viable. This alternative future would be the kind of world dreamed of by William Morris, full of humans engaged in meaningful and sanely remunerated labour. Except with added robots. It says a lot about the current moment that as we stand facing a future which might resemble either a hyper-capitalist dystopia or a socialist paradise, the second option doesn’t get a mention.’

But let’s come back to the here and now. If the whole world of technology, consumer products and services could reproduce itself without living labour going to work and could do so through robots, then things and services would be produced, but the creation of value (in particular, profit or surplus value) would not. As Martin Ford puts it: the more machines begin to run themselves, the value that the average worker adds begins to decline.” So accumulation under capitalism would cease well before robots took over fully, because profitability would disappear under the weight of ‘capital-bias’.

The most important law of motion under capitalism, as Marx called it, would be in operation, namely the tendency for the rate of profit to fall. As ‘capital-biased’ technology increases, the organic composition of capital would also rise and thus labour would eventually create insufficient value to sustain profitability (i.e. surplus value relative to all costs of capital). We would never get to a robotic society; we would never get to a workless society – not under capitalism. Crises and social explosions would intervene well before that.

And that is the key point. Not so fast on the robot economy. In the next and final post on the issue, I shall consider the reality of the robot/AI future under capitalism.