As we grapple with the large scale layoffs in IT companies, one of the factors cited for these job losses is automation. Automation and technical improvements are natural in the development of productive forces. But in the hands of capitalists, automation becomes a tool to make more profits for themselves and destroy livelihoods of the workers employed in the particular industry.
We publish here an account of how machinery displaces workers, increases production and widens the gap between and rich and poor from “Capital” published 150 years ago.
The description fits the reality even today. Replace carpet factory with IT company and fit appropriate numbers and currency of the 21st century India, you get remarkably accurate picture of today’s capitalistic development.
Automation and Jobs – 1
James Mill, MacCulloch, Torrens, Senior, John Stuart Mill, and a whole series besides, of bourgeois political economists, insist that all machinery that displaces workmen, simultaneously and necessarily sets free an amount of capital adequate to employ the same identical workmen. [a]
Suppose a capitalist to employ 100 workmen, at £30 a year each, in a carpet factory. The variable capital annually laid out amounts, therefore, to £3,000. Suppose, also, that he discharges 50 of his workmen, and employs the remaining 50 with machinery that costs him £1,500. To simplify matters, we take no account of buildings, coal, &c. Further suppose that the raw material annually consumed costs £3,000, both before and after the change. [b]
Is any capital set free by this metamorphosis?
Before the change, the total sum of £6,000 consisted half of constant, and half of variable capital. After the change it consists of £4,500 constant ( £3,000 raw material and £1,500 machinery), and £1,500 variable capital. The variable capital, instead of being one half, is only one quarter, of the total capital.
Instead of being set free, a part of the capital is here locked up in such a way as to cease to be exchanged against labour-power: variable has been changed into constant capital. Other things remaining unchanged, the capital of £6,000, can, in future, employ no more than 50 men. With each improvement in the machinery, it will employ fewer.
If the newly introduced machinery had cost less than did the labour-power and implements displaced by it, if, for instance, instead of costing £1,500, it had cost only £1,000, a variable capital of £1,000 would have been converted into constant capital, and locked up; and a capital of £500 would have been set free. The latter sum, supposing wages unchanged, would form a fund sufficient to employ about 16 out of the 50 men discharged; nay, less than 16, for, in order to be employed as capital, a part of this £500 must now become constant capital, thus leaving only the remainder to be laid out in labour-power.
But, suppose, besides, that the making of the new machinery affords employment to a greater number of mechanics, can that be called compensation to the carpet-makers, thrown on the streets? At the best, its construction employs fewer men than its employment displaces.
The sum of £1,500 that formerly represented the wages of the discharged carpet-makers, now represents in the shape of machinery:
- the value of the means of production used in the construction of that machinery,
- the wages of the mechanics employed in its construction, and
- the surplus-value falling to the share of their “master.”
Further, the machinery need not be renewed till it is worn out. Hence, in order to keep the increased number of mechanics in constant employment, one carpet manufacturer after another must displace workmen by machines.
a. Ricardo originally was also of this opinion, but afterwards expressly disclaimed it with the scientific impartiality and love of truth characteristic of him. See l.c., ch. xxxi. “On Machinery.”
b. Nota bene. My illustration is entirely on the lines of those given by the above named economists.