[OPE-L:7266] [OPE-L:794] Re: technical change and productivity change

Gerald Levy (glevy@pratt.edu)
Mon, 29 Mar 1999 04:35:29 -0500 (EST)

Re John's [OPE-L:793]:

> First, what do we mean by capital-
> saving? When a capitalist changes technique or, say, buys a new and
> better machine, then using the prices of the previous period, he
> expects less depreciation per unit output. Say he gets the price he
> expected. That's capital-saving. The machine would also be labor-
> saving if there is less living labor in each unit of output.

If there is no labor-saving, will the capital-saving technical change
raise the productivity of labor? How and why?

> Now if the output per worker is increased by
> a factor of 15 as this occurs, then there is actually less depreciation
> in each unit of output after the change.

Must output/worker (or the total output level) change when there is
capital-saving technical change?

Later, John writes:

> That accomplished, one can then begin to look
> at technical change in the real world which, in general, is both
> capital- and labor- saving.

A real world in which there is:

a) c, v, and s;

b) circulating c and fixed c; and

c) where fixed c depreciates.

> If the replacement of
> machines by newer machines is seen as capital-using, sooner or later
> we are forced to believe in the Rube Goldberg theory of technical change
> where a ten-fold increase in the investment in machinery brings
> about a less than ten-fold increase in output. It's my hope that
> the next generation of Marxists sees through this nonsense more
> quickly than I did.

A ten-fold increase in the investment in machinery could indeed bring
about a less than ten-fold increase in output.

A couple of examples:

1) the increase in investment in machinery might bring about a less than
ten-fold increase in output if the effect of the constant fixed capital
was to lower the amount of constant circulating capital required to
produce a unit of output. One might even envision a technical change in
machinery that left output levels and the productivity of labor unchanged,
but was still efficient and cost-effective if it decreased over the
"lifetime" of the new machinery the cost of constant circulating capital
more than the cost of the new machinery.

2) there need not be an increase in output if the machinery is used to do
something other than increase the productivity of (productive) labor.
For instance, if the new machinery increased the "productivity" of
unproductive labor in billing, marketing, sales, etc.

Thus it would be Rube Goldberg to assume that simply because there is a
ten-fold increase in investment in new machinery there must be a ten-fold
increase in output.

In solidarity, Jerry