Lose your job to automation: Mourn or celebrate?

The three links below of several hundreds that can be found on the internet news sources these days indicate clearly the rapidly accelerating advance of automated technology moving towards the elimination of jobs.

Walmart

Australia

Japan

So far, the action seems to be very widespread but is moving especially rapidly in retail as is clear from the evidence in Australia, Japan and the US. The rationale used to justify automation by Walmart management in the US is creative and ridiculous at the same time. Nobody in management wants to say that their companies are trying to reduce or eliminate their workforces altogether. But that’s exactly what’s happening.

Karl Marx predicted this very outcome in the mid-19th Century arguing that in their efforts to control or reduce their costs of production, businesses, after overproducing in the search for profits, turn to automation to control their labour force and return to profitability. The process has been going on for a long time.

It seems perfectly reasonable for businesses to try to become more ‘efficient’ by automating jobs that are tedious and repetitive, often dangerous. For individual businesses this seems like an effective strategy to control their costs and their processes. The problem is that there is anarchy in the business world, no coordination, and competition prevents cooperation between businesses in the same field of operations. The result is that there is a reduction in the aggregate number of workers in any given area and the reality is that bots don’t buy anything. Workers are also consumers so doing away with workers is doing away with your very own customers. Nobody I know in business is worried about taking customers away from their competitors, but if Walmart eliminates much of its labour force by automation that will inevitably also reduce its customer base.

So, the question is should you mourn or celebrate the loss of your job through automation? The answer is yes and no. The actual issue is not jobs, but income. You should definitely mourn loss of income. The loss of a job not so much. Jobs, i.e, employment, are not really in sync with the human capacity to work. Humans, as Veblen is quick to point out, are programmed to work, but if they are presented with meaningless, repetitive, boring work that is really to make someone else look good or get rich, they balk. So doing away with boring, stupid, meaningless jobs is a good thing in my mind. Several countries are now toying with a guaranteed basic income. It will take some time yet for the importance of this strategy to become more widespread.

We’re at a real crossroads at the moment. With the advent of advanced robotics, automation, and especially artificial intelligence, work will be required of fewer and fewer people for shorter and shorter lengths of time. There will be, in a very short period of time, a huge surplus of people as workers and a shortage of people as consumers. The elimination of tedious labour could result in an explosion of creative energy as people are freed to think for themselves and act according to their talents and abilities. However, they will need income to be able to do that.

One thing for sure, there will have to be a greater distribution of wealth because it does no one any good to hoard cash and take money out of circulation. It sure doesn’t help corporations involved in the sale of consumer goods. From this perspective, banks and financial institutions are at loggerheads with consumer driven businesses. There will have to evolve a very different ethic, one at odds with the current capitalist Neo-liberal one that I wrote about in my last blog post.

Are poor people moral degenerates?

They certainly are according to capitalist morality.

I’m sorry, but I’m going to fucking Jonathan Pie this post because I’m getting royally impatient and pissed off with you ignorant fuckers out there who, in your self-righteous, holier-than-though attitudes consider poor people to be less than human. Recently someone posted on Facebook that a group of volunteers had cleaned up after a homeless camp had been dismantled here in the Comox Valley. There was a nice photo of the volunteers attached to the item. The comments on this post were mostly supportive of the volunteers, but the odd comment slipped in there that was outrageously stupid as in calling the homeless camp residents ‘filthy pigs.’ Piss me off.

Would you call someone in the hospital dying of cancer a ‘filthy pig?’ Would you call someone who is physically disabled and unable to clean up after themselves ‘filthy pigs? Would you call someone who has been injured and unable to clean themselves or their rooms ‘filthy pigs?’

Some of you might answer yes to the above questions because you’re complete morons. Most of you, I assume, would answer no. The reason most of you would answer no is because you believe that the people who are the objects of the questions are not responsible for their conditions. Still, I think that a number of you who answer no to the above questions would answer yes if I had asked about responsibility. If I had asked: ‘Do you think people dying of cancer in the hospital are responsible for their situation?’ No, you would probably say. ‘Do you think that homeless people are responsible for their situations?’ Yes, you might say even though we know that ‘mental illness’, drug use, and other ‘ailments’ are not much different than cancer to the human body. It’s okay to be physically ill, but don’t be mentally ill because that’s a clear indication that you are morally weak. Cancer patients are not considered morally weak but if something goes wrong in your brain for any number of reasons you’re a loser and a moral degenerate and god forbid you get addicted to drugs or gambling.

So, what’s the basis for our beliefs about illness, homelessness, poverty, and disability? Well, it’s not that complicated although it’s shrouded in obfuscation and ideology. It’s all about morality. Capitalist, Neo-liberal morality. What the hell is that? Isn’t morality all about good and bad, and is it not a guide to how to live life properly? Is morality not just a set of ideas that are more of less universal and agreed upon for the most part? Basic things like those that can be found in the Christian Ten Commandments. Thou shalt not kill, covet thy neighbour’s wife and so on?

Well, those ideas are a part of capitalist morality but not even those ideas stand up to careful scrutiny as being universal behavioural precepts. It all depends on context and situation. Killing is perfectly moral if you’re killing an ‘other’. Morality is fundamentally grounded in material life. Veblen would say that ‘habits of thought’ are based in ‘habits of life.’ There is no such thing as a disembodied morality.

So, what is capitalist, Neo-liberal morality? I’m sure you won’t have any trouble identifying it when I point it out to you. It’s actually based on the ideas of people like the 17th Century writer and philosopher, Thomas Hobbes. He’s the guy who people sometimes quote as arguing that life is short and brutish. He and the ideology he helped spawn were (are) firmly attached to a growing labour situation in England whereby people were being systematically weaned from their relationships with their feudal lords and forced, more of less, into new wage based forms of employment. Capitalist morality is based on the ideas that one must be self-sufficient, that one is responsible for all of one’s actions, that one is in a constant power struggle with everyone else in a society, that one must work hard to ‘earn one’s keep’, that people are a bunch of lazy things that need to be prodded into action, that no individual is beholden to any society, that illness is weakness, that poverty is failure, and that all the good or bad that befalls us is our own doing.

Capitalist morality is based on the ideas that one must be self-sufficient, that one is responsible for all of one’s actions, that one is in a constant power struggle with everyone else in a society, that one must work hard to ‘earn one’s keep’, that people are a bunch of lazy things that need to be prodded into action, that no individual is beholden to any society, that illness is weakness, that poverty is failure, and that all the good or bad that befalls us is our own doing.

Of course all of this is a crock of shit and has been established over and over as a crock of shit by generation after generation of psychologists and social scientists. Problem is, the findings of psychologists and social scientists that don’t accord with the basic principles of capitalism with are summarize by C. B. Macpherson in the phrase ‘possessive individualism,’ are summarily dismissed by those people who have a vested interest in an unequal distribution of wealth which means rich people. Of course, that’s only partially true. Rich people are rich often not because of any stellar performance on their part. They often become rich because they have rich families to inherit money from. To get richer, it helps if you’re already rich, family-wise I mean.

So, in order to illustrate my thinking about morality I want you to think about a wall (why not, walls seem to be popular these days), a metaphorical wall that is. In the rough drawing I did below, you see a blue section in the middle, thin lines that surround that blue section and the thick line that surrounds it all and that’s what I call our moral wall. US and Others are located where they are to illustrate our relationship to ourselves and to others. Others, those people we just can’t relate to at all because they live in places very foreign to us, we consider outside our moral wall. They don’t even figure in our conceptions of morality, or of what’s good or bad. They are barely considered human. “US” on the other hand includes all people who share a world dominated by capitalist social relations. The closer one gets to the middle, the stronger the pull of Hobbesian ideas and real concentrations of wealth and power. The concentric rings represent groups of people who are related to the concentration of wealth but in various intensities and amounts. The closer one is to the vortex or black hole at the centre, the more one represents the ideals of capitalism and individualism and the closer to the wall one gets the weaker our relationship is to capitalist production. So, for example, people occupying the absolute (blue) centre are the 1% who control the greatest proportion of human wealth. The people who occupy the 2nd ‘arrondissement’ are still very wealthy but generally work as close advisors or specialists to the people in the dead centre.* The people in the 3rd ‘arrondissement’ are wealthy middle class investors, managers, CEOs, etc. The people in the 4th ‘arrondissement’ are the supporting class, the technicians, educated specialists who do the bidding of the 1% and of the people in the closer ‘arrondissements’. The people who occupy the 5th ‘arrondissement’ are generally technically trained but poorly educated cadre, often moderately well-paid but unhappy because of their distance from the centre. They so want to be rich. They buy lottery tickets. They so want to be like the people in the centre that they have tummy aches over it. They adore the people in the centre and know they can do no wrong otherwise how would they get to the centre of our moral universe in the first place? They must be blessed by God! Whatever the 1% do is fine by them even if it’s often considered illegal. If it is illegal, it’s legitimate to ignore the law of push to have it changed. The people in the 6th ‘arrondissement’ are the uneducated, the poorly trained, the unemployed, the poor, the marginal folks of all kinds. These people either see the 1% as gods to bow down to and revere (Trump followers) or as devils to resist in every way possible (progressives).

Now, the thing about people in the 6th arrondissement is that they often also look at the centre with melting hearts knowing always that their distance from the centre of our moral universe is all their fault. If only they had been better people, worked harder, made better decisions. dressed better, were better looking, went to school, everything would be hunky-dory. We absorb these feelings into the very fabric of our existence. They colour the way we see the world, and how we treat others.

That said, there’s people all the way through the multiple ‘arrondissements’, at least at the lower levels, that know the morality embodied in this fictitious moral world is bullshit. They know that there’s something wrong with a world based on defining personal worth by reference to how much wealth one has accumulated in one’s life and how well one did in the competition for scarce resources. Maybe they have gotten an education and have had to agree with social scientists that capitalism is not a natural human condition, but only a phase in history, one we would do well to escape as soon as possible before it destroys us all. Capitalist Neo-liberlism truly is a world without love (intimate connections with others), compassion and caring. Individuals who demonstrate love, caring and compassion are often ridiculed, marginalized, and called weak.

If we can get through this, I’m optimistic about the future. If we can’t beat the capitalist cancer that threatens to do us all in, we will succumb to the planet’s rejection of us because of our stupid overconsumption and lack of consideration of the world around us, the plants and animals that we need to survive and thrive. A pissed-off planet is not good for us humans. We are going to go extinct one way or another, but we don’t have to rush into it and drag most other species on the planet with us.

  • The dead centre of this moral world of ours is populated by individuals, certainly, but also by organizations like banks that concentrate wealth. So the situation is very complex on the ground but simple conceptually.

My next post: how is about how capitalist wealth is increasingly concentrated and why.

A Pointed Stick or a Backhoe: Take Your Pick.

Suppose you need a trench dug. It needs to be 50 centimetres deep, 120 centimetres wide and 30 metres long. You’ve never had to undertake such a project before. You have a choice of tools: pointed stick, shovel or back hoe. It would take you no time to learn how to use the pointed stick, a small amount of time to learn how to dig with a shovel, but learning how to use the backhoe would take you a substantial amount of time. What would you choose to do?

Now, think about this. You have a choice. You can mobilize 1000 people to dig your trench, 100 people to dig it with a shovel or 1 person to do it with a backhoe. All three of these options would take exactly the same amount of time. What would you choose to do? 

I know what I would do in this situation. I’d hire the guy with the backhoe. I wouldn’t for a minute contemplate hiring 1000 people with pointed sticks to dig my trench. That’s because it’s realistic for me to make this decision in the time and place in which I live. Obviously, if I lived 30,000 years ago, I would not have the option of using a backhoe. A pointed stick would be my only option and I would easily be able to mobilize all the help I need among my tribal members. 

It seems like a no-brainer to think that history has been a steady progress towards more and more sophisticated technology: pointed sticks to shovels to backhoes. However, not everything is what it seems. Let’s see what this situation looks like for someone starting from scratch. Let’s make the scenario really simple. Let’s have you dig a trench 3 metres long, 30 centimetres deep and 20 centimetres in width. 

The pointed stick is indeed a very simple tool and can be gotten with very little effort, sometimes by just picking one up off of the ground under a tree. Simple tools like this allow a person to get right down to work.  A little sharpening with a sharp rock might help if an already pointed stick couldn’t just be found, and some hardening over a fire could make the tool more durable. 

The shovel is a whole other thing. To make a shovel, even a fairly basic one, requires some wood and shaped metal, preferably a hard metal. So, while the person with the pointed stick is hard at work digging the trench, the person who has chosen to dig the trench with a shovel is looking around for a suitable piece of wood for the handle. That shouldn’t be difficult, although the wood may need some shaping. But then finding a suitable metal by mining will be more challenging. Extracting the metal from the ore by smelting then forging the metal and shaping it before fitting it on the handle will complete the project. Chances are pretty good too that more than one person will be involved in the making of a shove. There may be a specialist wood worker, a miner, a smelter and a blacksmith. By the time the shovel is ready for work, the pointed stick wielding worker may well have finished digging his trench. 

The backhoe is hopeless if the challenge is to start from scratch. The guy with the pointed stick would have already cut half a million trenches in the time it would take a person, or even an army of people, to build a backhoe from scratch. 

The Social Character of Human Production

What this all means is that human labour must always be assessed in its social context. All of the tools mentioned above have a certain amount of labour in their making. The sum total of the time it takes to dig a trench with a pointed stick, a shovel or a backhoe is only part of the story. The time it takes to fashion said tools must also be taken into account when calculating the time it takes to make something or accomplish a particular task. The labour embedded in the tool prior to when the digging actually starts is called crystallized labour or dead labour because it’s no longer active, having already played its part in creating the necessary tools to do the job. There is very little crystallized labour in a pointed stick, a lot more in a shovel, and a massive amount more in a backhoe. So, which tool is the most efficient? It depends on the social conditions under which the task is undertaken. 

The reality is that the more sophisticated the tool, the more crystallized labour contained in it. In the case of the backhoe, there are centuries of accumulated knowledge, techniques of raw material acquisition, processing, shaping and assembly probably including thousands of workers in many parts of the globe over many, many years. It also includes the work performed in the petrochemical industries that bring the machine alive so it can perform its duties. The pointed stick and the shovel have no need for extraneous inputs in their operation. Of course, once a backhoe exists it can, with one operator and enough diesel fuel, cut in a month as many trenches as a person with a pointed could cut in a lifetime.[1]

The crystallized labour included in any tool is part of the necessary capital required to produce anything. The tools themselves are capital. Another thing: the amount of capital necessary to produce the backhoe is social capital. It’s taken masses of people centuries to come up with the backhoe. It’s not the work of any single individual. A major aspect of this process is that pooled capital is subject to appropriation by people who organize the productive process but who don’t actually produce anything themselves as individuals. A backhoe is a product of the accumulation of capital and its control by a small minority of the population. So, historically what has happened is that the productive forces, particularly the tools and knowledge needed to make things happen have been increasingly socialized then privately appropriated. That’s history, folks. But what exactly does appropriation mean? 

Capitalist Appropriation

Appropriation means that ownership of the means of production has historically been privatized or concentrated in the hands of a few individuals as soon as there appeared the need for a division of labour or specialization in the productive process. The objective of appropriation early on was to remove control over the process from the people who actually used the tools and did the work. Frederick Winslow Taylor, in the early 20thCentury, created scientific management[2], a process whereby specialized workers, craftsmen, were removed as active agents in the factory to be replaced by managers who broke down the productive process into its constituent parts assigning workers, now disenfranchised, to accomplish just one task along an assembly line. Workers no longer individually created products but contributed only to one task in the process of the creation of a product. The quintessential expression of scientific management early on was implemented by Henry Ford in his assembly-line production of automobiles.

Workers were not too pleased about having their control over the productive process wretched from their large calloused hands so the early 20thCentury featured some of the most active labour protests and strikes in history. Needless to say, the process by which control over production shifted from workers to owners and managers started much earlier than in the 20thCentury as did labour strife. Regardless, the 20thCentury has proven to be THE century of capital’s monopolization of the productive process. In doing so, it has broken down the production of commodities[3]into specialized activities and has globalized the process, a situation made possible by shipping containers, cheap air transport, the internet, just-in-time production tied to supply chains, and the vassalization of countries.[4]It’s clear that the few individuals and the organizations they represent who control global wealth are finding it increasingly difficult to find effective investments. The reasons are simple in conception but complex when aggregate global capitalist activity is considered. 

A Shrinking Rate of Profit

As Marx noted, the only way a capitalist can make a profit through surplus value is by not paying his workers full value for their labour. In fact, profit is essentially the appropriation of unpaid wages. Veblen contested this Marxian notion in his The Place of Science in Modern Civilizationbecause, as he argued, who says workers deserve the right to the full value of their labour. Nevertheless, it’s still true that for many millennia human production has predominantly been a social affair so why shouldn’t we all share equally in what we produce? Well, we could and we might still, but we haven’t to date except for the odd ‘primitive’ situation millennia ago or in more and more marginalized indigenous tribal situations today. 

So, as we carry on today with increasing automation, computerization, AI, and technological innovation, the margins of profit continue to shrink because the more capital or dead labour is used in the productive process, the less room there is to extract surplus value from the process and make a profit. If, for example, Macdonald’s were to successfully replace all of its workforce with robots, it would find it more and more difficult to make a profit by paying its workforce less than the value that it produces. And, of course, robots don’t buy hamburgers, don’t pay taxes. The value of labour embodied in them as capital will allow for some profit to be extracted from the business of making hamburgers, but that basis for the creation of profit will quickly dry up. As the graph below shows, the amount of capital expended in the productive process is increasing historically while the share of labour in the process is steadily decreasing and/or devalued. Where we are along this process is anyone’s guess but I’m certain that we’re well past the midpoint and probably closing in on the far right side of the graph. 

So, as workers we have been systematically excluded from ownership and control over the productive process. Still, Marx found reason to be optimistic about the future. That’s the subject of my next post. 


Figure: Labour and Capital in Human History

[1]These estimates are completely arbitrary of course but are included to approximate the variation in values that are obvious in the scenario introduced.

[2]http://historytransformationofdesign.weebly.com/uploads/1/1/7/2/11722228/taylorism_and_fordism.pdf

[3]https://www.investopedia.com/terms/c/commodity.asp

[4]Vassalization: My word for the process by which the finance capitalist global oligarchy has come to treat countries. Certainly, since the 1970s but as a process going back to at least Bretton Woods, finance capital has turned countries or nation-states into vassals. From this perspective, countries are no longer sovereign or democratic, but instead are subordinate managers of the working class and guarantors of private property and private accumulation of capital. 

I wasn’t going to do this, but I just had to Butts in!


There has never been a clearer and more public demonstration of how much power multinational business corporations exert on national governments than the recently exposed SNC-Lavalin affair. In 2015 SNC-Lavalin (SNCL) realized that they were in serious trouble because of bribery and fraud allegations arising out of its business dealings in Libya so it was time to ramp up the pressure on the Canadian government to go easy on it. Starting in 2016 SNC-Lavalin worked hard at lobbying the federal government to include a Deferred Prosecution Agreement addition to the Canadian Criminal Code in the C-74 Omnibus Budget Bill in the summer of 2018, in anticipation that it would have to go to trial and potentially be barred from bidding on federal government contracts for ten years. With a DPA, SNCL could avoid a lot of nastiness and carry on with business as usual while using some of its eleven billion dollar a year profits to pay a fine instead of facing serious curtailment of its business. 

It’s a sordid affair, but apparently business as usual according to some. Bribery is necessary they say in crazy countries like Libya or it would be impossible to do business there. It happens all over the world, all the time, they say. Don’t come down hard on a poor downtrodden company like SNCL because its only doing what’s best for its shareholders, and its employees. Of course, its employees. Nine thousand jobs in Canada! Why, how could we allow a little bribery and scandal in a country like Libya to jeopardize nine thousand good jobs in Canada? Unthinkable! 

There are thousands of people in Canadian prisons for peddling or using drugs. The Canadian government wasn’t worried about them losing their jobs. Yeah, yeah, you might say, those druggies were doing illegal things so they deserved to go to jail! Well, I’m afraid that logic also applies to SNCL if it gets convicted of the charges its facing in court. 

The jobs argument is so ridiculous in any case. “Well, you can’t do that, there would be huge job losses!” I guess the guards and staff at Nazi death camps could have argued that after the war as their facilities were being shut down.[1]Or, horse breeders and buggy whip manufacturers when they were faced with the arrival of the automobile. 

Like I said, this is all pretty sordid stuff. After all, we live in a democracy don’t we? We are all represented equally by our government are we not? We don’t live in a plutocracy, don’t they say? 

Or this: “What kind of a commie opposes our good, wholesome multinational Canadian businesses?”

And what about this?: There is certainly plenty of evidence that the business of the Canadian government (presumably on our behalf) has historically been orchestrated by corporate interests going back as far as Confederation. (It was going on way before that too but Canada wasn’t officially Canada yet.) 

The Canadian Pacific Railway (CPR) of the post-Confederation 19thand early 20thCenturies was the past equivalent of modern day SNC-Lavalin. Of course, it’s not a perfect equivalence, but SNC-Lavalin has been front and centre in the massive transfer of public tax money into private hands by way of infrastructure projects and public/private partnerships (P3s).[2]That’s just like what happened decades ago with the construction of railroads in Canada. No P3s back then, but, relatively speaking, just as much transfer of tax money into private hands. So it goes.

I don’t know what Jody Wilson-Raybould’s motivation is for doing what she did. I tend to believe what she said to the Justice Committee. Gerald Butts to me is unbelievable but a great flag-waver for big business’ interference in Canadian politics. He’s never been in business himself. He’s a policy wonk. But he sure knows who to bow down to when he leaves a room and it ain’t you and me, nor SNCL workers. 


[1]I know I’m not supposed to mention Hitler or Nazis or what they did. It’s kind of an online rule: https://en.wikipedia.org/wiki/Godwin%27s_law

[2]SNCL is proud of its P3s in Canada: http://www.snclavalin.com/en/market-services/capital.aspx

It’s your life, so sell it along with the rutabaga!

This is one way to think about modern capitalism. There are others.

Most of us glide through life not thinking particularly deeply, if at all, about the underlying forces controlling our lives.  In fact, we are taught all along that there are no forces that control our lives at all and that we are fully in charge of our lives whatever we make of them. That belief is actually part of the very real underlying forces I just mentioned, one that aims to line up our personal lives in such a way that we don’t question the forces that drive us to behave in certain ways and not in others.[1]

An example might help.  I’m sure you found yourself recently in a grocery store buying food for the week, or maybe just for dinner, assuming that is that you have enough money to actually shop in grocery stores and not in dumpsters, but that’s another matter I’ll deal with later.  Two aspects of this shopping scenario are of interest to me here.  First is the idea of the store itself.  How many of us actually question the very existence of the store? Not many, I’m sure.  

Stores are such a regular and ubiquitous part of life that we tend to think of them as just part of the landscape, as places to go buy things, certainly, that is if we think of them at all.   Well, a store is nothing more than a place where things are stored, awaiting distribution or for people to come along and pick them up in exchange for money. People have been storing things ever since the dawn of humankind.  

Finding secure places to store food and other goods has been a human preoccupation throughout history (and pre-history for that matter).  In a situation where food is readily available and there is no worry about spoilage because it’s consumed very soon after it’s collected, storage isn’t an issue.  This was true, for instance, of the !Kung San in Southern Africa before colonialism. It does become an issue when there is a large number of people to feed and where food can become scarce at times. Obviously, food storage is not so much an option for nomadic as opposed to settled peoples so it has been a very important pre-occupation of humankind especially for the last ten thousand years or so since the advent of large scale domestication, settlement and formal government.  Preserving food then becomes imperative and storing it securely even more so.  

So, we’ve needed to store food and other products for a long time.  Once food and other goods are in storage, they need to be made available to people for consumption.  Not just any people, of course.  In what we know of pre-history and early history, family was the most important unit of distribution.  People would pass around chunks of meat around the campfire. As we went along as a species especially in certain parts of the world we now know as the Middle East, Europe and the Far East, the units of distribution grew ever larger driven by domestication and urbanization.  Well, that was then, what about now?  

Eventually, political units tended to grow in size and motivations changed.  There was an increasing need to mobilize, equip and feed large numbers of people for various tasks like war, agriculture, large infrastructure projects like water diversions, roads, sanitation systems as well as religiously inspired projects like pyramids, cathedrals and the like. This historical development required innovations in storage management and distribution.  Centralized storage systems like granaries, warehouses and eventually freezing and cold storage facilities grew more prevalent.  But of course, human production never occurs in a vacuum.  Production, distribution and consumption, the three ‘moments’ of human production are not just economically but also politically driven for the most part and limited by the availability of raw materials, labour and technology.  In our time, and for the past three centuries, give or take a few decades, business has been increasingly dominant in all phases of human production.  Business. Yes, business. 

Business is a method, a way of organizing human activities, most predominantly economic activity.  That said, the ways and means of business have become pervasive in all types of organizations, governments and non-profit.  It’s a truism to say that businesses exist to make money. That’s not all they exist for, but if they don’t make money they don’t last long (unless they get government subsidies which they often do). And what is the interest of business in human production? Well, as I noted above, business is an organizational vehicle for the production, distribution, and often, the consumption of commodities. Note that I said business is in it for the creation of commodities not products. 

Commodities are products specifically created for the market. General Motors doesn’t make vehicles for its own use, it makes them to sell. Once a vehicle is sold it no longer holds any interest for GM. In fact, if people, car buyers, were more concerned with GM’s welfare (as GM thinks they should be) they would drive their vehicles into the first power pole they encountered upon leaving the auto dealer lot. That would mean an opportunity for GM to sell another vehicle to replace the one just smashed up against the power pole. Smashing up cars is good for business. 

Of course, the scenario I just painted is simplistic and the real situation is much more complex, but the truth is that business makes products to sell. We call those products commodities. Distribution businesses like grocery stores are also in the business of making money but their challenge is somewhat different than GM’s. Grocery businesses have conditioned us over the decades to expect a myriad of consumable commodities on their shelves. People (like you and I) get very upset when they see empty shelves or even half empty shelves in their favourite grocery store. I can hear people saying to themselves “What’s wrong? Why are the shelves getting empty? Should I stock up?” Fear and panic can set in. So, it’s better to keep the shelves topped up to avoid triggering a sense of doom and scarcity.

The reality is that grocers can never sell all the commodities that grace their shelves so masses of produce, meats, dairy products and other perishable items get tossed in the garbage every day. That is of no fundamental concern to the grocer (can you say Jimmy Pattison) as long as on average and over the long term enough commodities get sold to still make a profit. The ‘wastage’ is collateral damage. If food producers and distributors actually made food to consume rather than to sell, there would be no hungry people on the planet. But that’s not the way our world works. We allow people to starve if they have no money to bring to the market to exchange for food. It’s all about the market.

People get consumed too in the productive process. We sell our labour-power to a buyer at the best price we can get if we’re lucky and that buyer then has the ownership of our time and our capacity to work. Our time spent at work is not our time. It belongs to our employer.

However, my point is that we have to own ourselves in order to sell ourselves just like we have to own a rutabaga to sell it. That’s a basic legal foundation of capitalism. As owners of our labour-power we enter the market as free players, at least in theory. And if we are free players in the market we must also be free players in other aspects of our lives. It’s a singular philosophical expression of the reality of life in a capitalist society. More on this in another post. This one’s long enough already. 


[1]Dr. Bruce Lipton explains how we get programmed early in life to accept the reality we are presented with:  https://www.youtube.com/watch?v=7TivZYFlbX8

Capitalism: On Its Way Out?

I’m going to try to keep this simple. The answer to my own question in the title of this post is: of course. All things come and go. The era of capitalist domination will inevitably come to an end one way or another. How long capitalist domination can hang on is open to conjecture but it carries within itself the seeds of its own destruction.

I’m actually researching a series of blog posts on the relationship between capitalism, liberalism and democracy. Below I consider the most important dimensions of capitalism including its life-historical reality, its structure as a set of social relations, its difference from other modes of human production and its effects on morality and other aspects of life. If you haven’t read my post Is Canada a Capitalist Country?, now would be a good time. I may have been a bit too strident in that post, but I’ll try to make up for that here.

Some writers, actually many writers who might now be considered apologists for capitalism (and some left-wingers too) claim that the spirit behind capitalism has always existed in us humans. They argue that the key to capitalism becoming the dominant mode of production in history was removal of the fetters that kept it from emerging. I don’t buy that and neither does Ellen Meiksins Wood. Capitalism didn’t evolve next to feudalism and just wait until the time was right to overthrow feudal social relations. Capitalism grew out of the failing social relations of feudalism.

Simply capitalism is based on the system of wage labour. As feudalism was on its way out, there was a lot of stress between serfs and lords. Many lords couldn’t keep up with their responsibilities towards their serfs and serfs were reluctant to wait around for the lords to get their shit together. The productivity of agrarian England, particularly regarding wool production, for example, was rapidly diminishing to the point where in the 17th Century a half of English workers (called servants then) were wage labourers. I’ll not get into the specific mechanisms and forces that led to that outcome in this post but will explore it later in review of C. B. Macpherson’s book The Political Theory of Possessive Individualism (Oxford, 1962).

As workers we have a relationship to our bosses, our employers, based on wage labour. In a classic capitalist scenario, a capitalist hires workers to extend his or her own capacity to produce commodities for sale. It’s no surprise that businesses that mine oil and gas, for example, are referred to as petroleum producers. That designation does not include the people who work for those businesses. Hasbro is a toy producer. No reference to their workers as the real producers. Their labour power has been bought and paid for by the capitalist and he or she can therefore refer to it as his or her own labour. After all, it was bought and paid for.

Capitalists buy our labour power. Not our labour, but our labour power, our capacity to work. Of course a lot of us never work for an individual capitalist. We work for governments at various levels or non-profits. So, it’s more accurate to say that workers as a class work for capitalists as a class.

The system of wage labour has infiltrated every nook and cranny of our worlds. We expect to grow up to be nothing else than workers or employees (as many people prefer to be called) and we are trained at home and at school to expect no other outcome. We just want a good job. So few of us can ever become capitalists despite our dreams. Besides, the reality is that we, as individuals, are not very important in the scheme of things. It’s capital versus labour on a grand scale that counts historically. Individuals are simply personifications of our classes and no one is indispensable. Steve Jobs, the founder of Apple died a while ago but Apple lives on. Us workers are a dime a dozen. You want to find meaning in your life? For most people it’s futile to even contemplate finding ‘meaning’ in their work.

So, why will capitalism die? Because of its own efficiency and effectiveness. Due to severe stresses often caused by periods of overproduction of commodities, the capitalist class embarks on a program of renovation that changes the relationship between capital and labour. Globalization is a result of that renovation. Capitalists seeing their profits drop from failing sales have some options. They can curtail production and they can make their production processes more efficient, meaning that it takes fewer units of labour to produce the same product. They can also move production around like build a factory in Sri Lanka to take advantage of low wages, favourable labour and safety laws, better access to raw materials, and new markets.

Let me back up a bit to a very simplified illustration of what happens when someone wants to produce a product. Let’s look at a hypothetical product called a widget. It’s for ducks to perch on. So Sam McGee, a prominent local duck hunter and entrepreneur decides he wants to produce widgets. What does he do? Well, he gathers together all the things that he will need, what I call INPUTS in the table below. He hires a manager and the manager gets on with it. Sam sits back and watches the whole thing unfold from his condo in Panama.

The dollar values on the right in the table below are the costs per widget. In this case they add up to $28.50. He envisions making a profit of $12.50 per widget. Not bad. Note that McGee has to hire workers before he starts operations. Workers are part of the inputs. Workers do not share in the profits of the business. Workers’ labour is part of the costs of production like the land, equipment, and raw materials. McGee has agreed to pay market value for all the inputs. In this scenario, McGee gets $40 per widget which he also sells at market value. So how does McGee make money?

Sam McGee’s World

The Widget factory
 INPUTS
raw materials$2.00
equipment$4.00
land$5.00
buildings$5.00
labour$8.00
power$0.50
overhead$4.00
TOTAL$28.50
OUTPUTS
Widgets $40.00

Well, McGee is a clever kind of guy and he’s figured out that he can make money as things are. All he has to do is make sure that his costs of production amount to less than what he can get for widgets on the market. If the workers shared in the profit, the table above would look somewhat different. The $8.00 Sam pays his workers would rise to $20.50. So, the only way Sam cam make money is by not paying his workers full value for their labour. The $12.50 in profit comes from not paying his workers a full share of the market value of the widgets.

His cleverness will be tested, however, when the market for widgets collapses because he’s now produced a lot of widgets and he’s saturated the market and because he also now has competitors that pay lower wages and make even more money than he did. Damn. What to do? Cutting production is an option. The problem is it takes 10 workers to make 100 widgets a day. They can’t make any more and if they make any less, the costs of labour per widget go up. So what to do. Sam, the clever guy, knows a guy in welding and fabrication who says he can build Sam a piece of equipment that will allow for the same output of widgets but using half the current employees. Not only that, the equipment will allow Sam to tailor his production of widgets to any number he wants. Bonus! Sam gets on that right away, installs the equipment and fires half his staff. He also cuts back on production temporarily and lays off half his staff again. He’s now down to 2 workers and is still producing widgets, but a lot fewer of them. Sam is still making money but his workforce is not doing too well by him. As a side thing, Sam needs to also figure out how to make flimsier widgets. The ones he makes last way too long. He has to cultivate a forever returning clientele.

I know this is a huge simplification of how capitalism works, but it’s the essence of the thing at least from the production end of things. Of course, there’s money to be made in the distribution of commodities too and in their consumption. And if Sam needs to borrow money all the better. Then Goldman Sachs can get rich too.

What I’ve just shown here, simplified as it is, is the way that the labour force is being squeezed right out of existence. Either production is automated to eliminate workers altogether or the value of labour power is so reduced that workers can’t survive on the wages they are offered. We’re in that place right now. Simply put, there is a greater and greater amount of capital going into production at the expense of labour and as the system gets closer and closer to essentially eliminating necessary labour, the margins of profit drop, and capital can no longer exploit workers.

Oh, but it’s so much more complex than this. Governments have gotten into the picture helping Sam McGee in his time of terrible trouble partly by helping to manage and maintain his now mostly unemployed workers. (On EI, they are always free to come back to work. They constitute a free pool of labour for Sam). Banks too have joined governments to ensured that Sam will be fine. After all, Sam is the creative producer and his workers are nothing more than part of the cost of production. Sam needs our help!

Now think of Sam McGee as the totality of global commodity production and think of his workers as the global labour force and you will begin to get the picture.

In my next post I tackle how capitalism along with its essential liberal legitimation has infiltrated our very psyches, our values and our morality, and I will address how that infiltration is not as solid as it might seem.