A History of Economic Thought by Barber William J.;

Author:Barber, William J.;
Language: eng
Format: epub
Publisher: Wesleyan University Press
Published: 2009-04-10T04:00:00+00:00

In short, energies devoted to condemning the behaviour of capitalists were misplaced. As Marx observed in another context: ‘What avails lamentation in the face of historical necessity?’21

Clear limits, however, were attached to the amount of accumulation undertaken at any one time. Marx stated these limits in terms that flowed directly from his labour- input analysis of value. Investment in machinery, he maintained, would be worthwhile only when it resulted in the displacement of labour. The value of a commodity could be reduced only to the extent that the labour content of the final output had shrunk. From the capitalist’s point of view it would be worthwhile to acquire additional machinery only when the sum of direct and indirect labour inputs would subsequently be lower than had formerly been the case. In Marx’s words, ‘the limit to his using a machine is fixed by the difference between the value of the machine and the value of the labour-power displaced by it’.22

This line of argument, virtually by definition, made the substitution of machinery for labour a precondition for the acquisition of capital goods. This proposition was crucial to the embellishment of Marx’s model. Ricardo had anticipated the conclusion in the chapter ‘On Machinery’ in the third and final edition of his Principles. He then amended his earlier support for the position that the immediate competition between machinery and employment would be offset by releases of funds which could be used to engage more labour.23 The mainstream of classicism, it will be recalled, rested its case on the argument that this compensating effect would shortly neutralize – by swelling profits and thereby increasing the subsequent demand for labour – any short-term appearances of technological unemployment. This view, Marx insisted, was fallacious in that it presupposed that all of the ensuing gains to the capitalist would be ‘destined to support labour’. Marx, on the contrary, maintained that the laws of motion of capitalism demanded that part of the expanded surplus be allocated to the acquisition of machinery. Moreover, when this occurred, the total demand for labour would necessarily diminish. Marx, of course, recognized that the introduction of higher techniques might be associated with reductions in costs and with growth in the volume of output. To this extent, mechanization might generate additional demand for labour in industries producing machines and supplying raw materials. Such gains in employment he held to be temporary and soon to be neutralized by the accumulation of machinery by capitalists engaged in supplying these inputs.

But even this short-lived stimulus to the demand for labour might be swamped by forces moving in a counter direction. Among its other consequences, the increased use of machinery would have the effect of killing off the jobs of those who worked with older and inferior techniques. Handicraft workers would be among the first to feel the sting of the spread of industrialism; much of their labour time would become ‘socially unnecessary’. Later, as the application of industrial techniques gained momentum, the weaker and smaller capitalists would be destroyed.

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