[OPE-L:7259] [OPE-L:784] technical change and productivity change

Gerald Levy (glevy@pratt.edu)
Sun, 28 Mar 1999 07:41:30 -0500 (EST)

Another comment on John's [OPE-L:702]:

> Your critique does little but belittle Andrew's point --
> the fall in the rate of profit does not depend upon labor-saving and
> capital-using technical change. Indeed, for Marx the rate of profit
> can and does fall even when capital-saving techniques are used. The
> degree to which they are labor-saving as well, which they generally are,
> is not the focus.

Andrew's point -- as you should recall -- was that "the profit rate falls
*because* productivity rises".

I don'd disagree with the suggestion that this was part of Marx's theory.

However, since we are talking about a situation where ***technical change
leads to an increase in the productivity of labor***, technical change in
this instance *must be* labor-saving. (yes, of course, technical change
could also be capital-saving. e.g. it might lead to a reduction in the
cost of constant circulating capital).

At issue is what this term "labor-saving" means. Assuming *constant* real
wages, I think it can mean 1 of 2 things:

1) there is a reduction in the employment of productive labor (this would
occur where productivity is increasing but output is constant);


2) the labor cost per unit of output decreases but the size of the
productive labor force stays the same ... or might even grow (this might
happen where productivity is increasing but output is also increasing).

In any event, technical change which raises the productivity of labor --
and it is ***that type*** of technical change that brings about the fall
in the rate of profit according to Marx (as he explains in Vol 3, Ch. 14)
-- is ***labor-saving***.

Thus, the rate of profit falls because productivity rises, not because of
capital-saving technological change (even though capital-saving technical
change may happen concurrently with labor-saving technical change).

In solidarity, Jerry