The economists argue that when machinery is introduced, the resultant saving in capital (in paying wages) will be released for other uses. But, when employees/workers lose jobs due to automation, not only the wage/salary money is freed, but also the food, clothing and other life necessities for the unemployed workers were set free.
Automation and Jobs – 2
As a matter of fact the apologists do not mean this sort of setting free.
They have in their minds the means of subsistence of the liberated work-people. It cannot be denied, in the above instance, that the machinery not only liberates 50 men, thus placing them at others’ disposal, but, at the same time, it withdraws from their consumption, and sets free, means of subsistence to the value of £1,500.
The simple fact, by no means a new one, that machinery cuts off the workmen from their means of subsistence is, therefore, in economic parlance tantamount to this, that machinery liberates means of subsistence for the workman, or converts those means into capital for his employment. The mode of expression, you see, is everything. Nominibus mollire licet mala.
This theory implies that the £1,500 worth of means of subsistence was capital that was being expanded by the labour of the 50 men discharged. That, consequently, this capital falls out of employment so soon as they commence their forced holidays, and never rests till it has found a fresh investment, where it can again be productively consumed by these same 50 men. That sooner or later, therefore, the capital and the workmen must come together again, and that, then, the compensation is complete. That the sufferings of the workmen displaced by machinery are therefore as transient as are the riches of this world.
In relation to the discharged workmen, the £1,500 worth of means of subsistence never was capital. What really confronted them as capital, was the sum of £1,500, afterwards laid out in machinery.
On looking closer it will be seen that this sum represented part of the carpets produced in a year by the 50 discharged men, which part they received as wages from their employer in money instead of in kind. With the carpets in the form of money, they bought means of subsistence to the value of £1,500. These means, therefore, were to them, not capital, but commodities, and they, as regards these commodities, were not wage-labourers, but buyers.
The circumstance that they were “freed” by the machinery, from the means of purchase, changed them from buyers into non-buyers. Hence a lessened demand for those commodities — voilà tout.
If this diminution be not compensated by an increase from some other quarter, the market price of the commodities falls. If this state of things lasts for some time, and extends, there follows a discharge of workmen employed in the production of these commodities. Some of the capital that was previously devoted to production of necessary means of subsistence, has to become reproduced in another form. While prices fall, and capital is being displaced, the labourers employed in the production of necessary means of subsistence are in their turn “freed” from a part of their wages.
Instead, therefore, of proving that, when machinery frees the workman from his means of subsistence, it simultaneously converts those means into capital for his further employment, our apologists, with their cut-and-dried law of supply and demand, prove, on the contrary, that machinery throws workmen on the streets, not only in that branch of production in which it is introduced, but also in those branches in which it is not introduced.