[OPE-L:4967] Re: labor saving technical change

john ernst (ernst@pipeline.com)
Sat, 10 May 1997 11:14:14 -0700 (PDT)

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RE: Jerry's OPE-4965

John wrote in [OPE-L:4964]:

> But with the domination of
> living labor by dead labor in the process of production, why
> would we not expect the replacement of machines by machines to
> prevail in the accumulation process? Or, in other words, why
> would we not expect capital saving albeit with some labor saving
> techniques to be the typical form of technical change?


I think this is a false dichotomy, i.e. labor-saving and capital-saving
technological changes are different aspects of the _same_ phenomenon.

John: I would say it is no dichotomy at all. Rather the dichotomy
is between capital saving and capital using technical change.
Unfortunately, labor saving technical change is often equated with
capital using technical change. Now when there is little or no
fixed capital conflating the two ideas seems harmless. However,
given a mechanized economy, a bit more clarity is necessary. Capital
using technical change means increases in the constant capital to
output ratio with the simultaneous pricing of inputs and outputs;
capital saving technical means decrease in the constant capital to
output ratio with the simultaneous pricing of inputs and outputs.

To see confusion over this issue, let me suggest that you check out
V3, Ch 15, Sec 4. The first few paragraphs are written by Marx.
Engels then "finishes" the section and takes us from clarity to


Consider a technological change that increases relative surplus value in
the period of "modern industry." Typically, this is *both* labor-saving
and capital-saving. In others words, newer (better) means of production
replace older (inferior) means of production and labor is "saved" in the
production process. This means that *either* living labor is _displaced_
from the production process *and/or* the _UNIT labor input_ decreases.


I do not see why living labor might not be displaced and unit labor input
decrease. Indeed, the poor devils who were working with the older
machines seem to be displaced. Will they be absorbed into the new
social capital? Obviously, it would depend upon, among other things,
the level of aggregate demand as you suggested.

"On the aggregate level, we have to look at *aggregate demand* to see
whether the workers displaced from some branches of production are
hired into other existing (or new) branches of production in the
presence of capital-saving and labor-saving technical advances."


Several scenarios:

(1) A capital-saving and labor-saving technology is adopted by one firm in
a branch of production, but not others. We would expect this to lead
to a redistribution of surplus value within that branch. In that
case, it is possible that since the innovating firm can capture a
larger segment of the market and, thereby, expand output the net
impact _within_ that firm _may_ not include labor displacement since
output may be expanding. In that case, the possible net labor
displacement might appear in the _other_ firms within that branch of

I think you jump the gun here. That is, why does the innovating firm
capture a greater market share? Has it reduced its price or does it
simply make a greater profit by selling the produced commodity at the
same social value as before? If so, clearly it is getting a larger
share of the surplus value produced. The firms without this technique
may well earn the same surplus value as before.


(2) Suppose that the new capital-saving and labor-saving technology is
diffused within all firms in the branch of production (although,
obviously, this process can not take place instantaneously). Even
though "machines replace machines", since the productivity of labor
has risen, there will be labor displacement _within_ that branch of
production *if* branch output remains constant (or, of course,
decreases). On the other hand, an increase in output within that
branch may be sufficiently large -- with an expanding market -- that
labor-power is _not_ displaced even where the productivity of labor
has been increasing.


I agree that both labor displacement may or may not take place.