[OPE-L:7279] [OPE-L:807] Re: Tech change

John R. Ernst (ernst@PIPELINE.COM)
Wed, 31 Mar 1999 13:14:21

Re: Jerry's [OPE-L:806]:

I had written:

> The issue is capital-
> saving versus capital-using given labor-saving in both cases.

I am not sure that this is the issue.

I think, rather, that there are # of issues:

A. (Some) Marx questions:

1) when discussing technical change *in the context of the level of
abstraction of the law of the tendency for the general rate of profit
to decline (LTGRPD)*, did he believe that technical change was in

a) labor-saving and capital-saving; or,
b) labor-saving and capital-using?

Why or why not? In other words, what is the logic -- as well as
textual evidence -- for each position?

My comments: Clearly, I would choose "a" and not "b." This raises
two questions -- Why "a"? Why not "b"?

Why "a"? The manner in which technical change takes place in the
period of large-scale industry is rarely specifically addressed by
Marx. In our discussions, we've seen 3 passages in which Marx
claims that technical change is capital-saving. There are a
couple of possible responses to Marx on this.

i. He was simply mistaken.
ii. Capital-using technical change still dominates. Marx was
not talking about the general case in those passages.
iii. Given Marx was simultaneously valuing inputs and outputs
it is impossible to develop a FRP if technical change
is capital-using.

I think you know where I stand on "i" and "iii." On "ii" I would
simply consider the degree to which labor has already been replaced
as I look at the possibility that there is enough labor-saving as
one introduces capital-using technical change. Put simply, the
change in technique has to be economically viable.

Why not "b"? First of all, I find little evidence to support it. That
is, I think we need to look at the replacement of machines by machines
on the micro-level to get at this one. Will we find some capital-using
changes in technique? Of course. Generally, these will occur in industries
where the c/v ratio is relatively small. In other words, such changes
take place primarily as one moves from a period of manufacture to one
of large-scale industry. To maintain that this is still the dominate
form of technical change seems to impose the transition between the
2 periods to the latter period itself.

If machinery is objectified labor, then I see no reason why the
replacement of that labor in the period of large-scale industry
would differ from the replacement of living labor by more living
labor in the period of manufacture. In the period of manufacture,
doubling the living labor more than doubles the output. In the
period of large-scale industry, doubling the fixed capital input
more than doubles the output. It is, in my judgment, that simple.
What's left out? Clearly, the labor-saving nature of technical
change can allow a new technique to be economically viable even
though it is capital-using relative to the one it replaces. But,
again, as the c/v ratio increases the possibility of developing such
techniques decreases.

To continue to insist that technical change is capital-using one
must at least cite a few examples in today's world. Here, I'd
like to know the prices of both the old and new as well as the
change in output.

We should also note that if technical change is capital-using, then
there is at least one aspect of demand that is growing faster than
output -- the demand for fixed capital. How then can we say that
competition lowers the social value to that of the individual value
as innovation takes place?

Jerry wrote:

2) did Marx hold that on a *more concrete level of abstraction* that
technical change would be (in general):

a) labor-saving and capital-saving; or,
b) labor-saving and capital-using?

My comment: I do think he distinguished between the period
of manufacture and that of large-scale industry. Clearly,
he discuses the movement from one period to the other as well
as the manner in which technical change takes place within

Jerry wrote:

B. Non-Marx questions:

1) what is the logic that can be developed -- aside from looking at
what Marx had to say -- about this question? E.g. what do we
expect to happen in general during the course of accumulation to
the capital- output ratio and why?

My comment: It will fall. Why? Technical change tends to be capital-saving.
I do think we need to consider Marx's basic idea that a doubling of inputs
more than doubles outputs. Hence, his whole but on technical change starts
with "simple co-operation." This type of technical change does, of
course, mean that capitalism generates a demand problem as accumulation
takes place. In a sense, any cost curves developed on this basis would
continue to fall. If accumulation does not accelerate, capitalism has
some real problems.

Jerry wrote:

2) what is the historical and empirical evidence concerning whether
technical change under capitalism is in general labor- saving and
capital-saving or labor-saving and capital-using? Note that this
involves looking at the historical/empirical evidence before
Marx's time, during his lifetime, and after his death. In other
words, we have to see what type of technical change occurred
during different periods of capitalist history.

My comment: People try to sell new machines. Others show me their systems
of machinery. I've never seen anything that is capital-using and
labor-saving. In my limited experience, I'd say Marx was right. To
look at other industries would be a worthwhile endeavor. But here
we have to look at the prices of the new machinery as well as the change
in output.

I had written:

> Note that with "lower costs, constant output", you may well have capital
> saving and labor saving as well. Hence, no falling rate of profit. Indeed,
> no accumulation of capital. Do you really think that the accumulation
> of capital has stopped in "late capitalism"?

I'm not sure that this "Hence, no falling rate of profit" is the case. As
for the accumulation of capital, how are you defining the term here? (you
might recall that Paul Z and others, including myself, once had an
extended exchange on this list about that question).

My comment: I don't recall that extended exchange.

I had written:

> My comment: We seem to have more than enough problems dealing with
> change and productive labor. I am reluctant to jump to unproductive
> labor. To those who think the unproductive is of a "large size", I'd
> like to know how they determine this. If it is by simply looking at
> "capitalism in one country", then I think we need to consider the global
> economy as well. We, in US, seem especially prone to generalize from the
> US case.

Jerry wrote:

I think you are right, in general, when you assert that "We, in US, seem
especially prone to generalize from the US case". Yet, there have been a
number of empirical studies on this question using data about many other
countries. Indeed, many of those studies have been authored by

If what you are saying is that we need to have accurate data on all
capitalist economies, then my answer is that that might have to wait until
after the revolution. Yet, the empirical evidence that we have seems to
suggest very strongly that there has been a trend for the percentage of
unproductive laborers (in relationship to the total working population) to
grow very significantly over time.

If you (or others) have empirical evidence to the contrary, then I would
like to see it.

My comment: Here, I'll simply say that we need to look at that growth
in unproductive relative to the growth of productive labor in other
parts of the world. In the U.S., more and more of what we consume,
individually and productively, is produced elsewhere. Thus, it
is not surprising that productive labor in the US is declining
relative to productive labor.


I had written:

> 3. Of course, Marx did recognize the existence of unproductive labor;
> however, he never used the category to develop his notion of the
> falling rate of profit. Should we?

Jerry wrote:

Good question. I think that if we want to consider the capital
accumulation process, then we will have to include the categories of
productive and unproductive labor. If this is a subject appropriate for,
for instance, a consideration of the process of capitalist circulation,
why shouldn't we consider it when we move to the level of abstraction
where there is capitalist production as a whole?

My comment: Right now, I have some difficulty with the question. That
is, given I'm not entirely sure how capital accumulates as it introduces
capital-saving technology and bases those changes of technique on the
RRI and not the rate of profit.

I had written:

> If we are unclear about how technical change can be both capital-saving
> and labor-saving in the period of large scale industry with a falling rate
> of profit, then I fail to see how dragging in the concept of unproductive
> labor can help us resolve the unclarity. Indeed, it would seem to a way of
> avoiding the issue.

Jerry wrote:

Didn't Marx believe that there would be both a absolute and relative
growth in unproductive labor in the period of large-scale industry? In
other words, wasn't this one (important) part of what we think happens
during the course of accumulation? If so, then we avoid it only at our

My comment: I don't know if he did or did not and, given the state
of our understanding of technical change, I see no reason to move
to that "level of abstraction."