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[ESC]DOC TAYROC'S [UNSOLICITED] ECONOMICS HOT THOUGHT
Marx and the Death of the Author XIII: Are factories the engine of progress?
This is part three of the 'sectoral analysis: Lewis style' series that I started here, and continued here. As I want to make clear here, an additional critique of Lewis' model I have here is the idea that one sector is more valuable, and therefore more desirable, than the others. The idea that the value of a sector is reducible to mere productivity relative to GDP is a fairly recent phenomenon, emergent after the Second World War, like the measure GDP itself. It's also an extremely capitalist perspective, that the only value labour of any sort can provide to the overall economy is its profitability. These assumptions have lead to a series of gross mutations in the agricultural sector, pushing it towards monopolisation and the 'factory farms' that contribute not only to climate change, but as the current American health epidemic is showing, will also lead to continued exposure to fun and exciting new diseases, and/or exciting new variants of diseases that humankind has battled for centuries. Rather, I argue, for a healthy economy of any variety, you need all three sectors to be robust and healthy as well, and we need to re-examine and develop these sectors in a way that prevents the kind of centralisation of resources (be it capital or otherwise) in such a way as to continue colonial metropole-periphery organisation. It won't be easy, but as I've already pointed out how the current organisation of agriculture alone contributes substantially to climate change, this may be something we as a species must do in order to insure our continued survival.
But today, we look at the secondary sector, also called the manufacturing sector. In Lewis' work, back in the 1950s, he identified this sector as being 'low labour/high productivity'. In our modern three-tiered system manufacturing becomes the awkward middle child, sitting instead of 'middle labour/middle productivity'. This is likely a good time to define what Lewis, and broader economics, means when we talk about 'productivity':
P = \frac{£}{t}That is, productivity is the rate of profit over the amount of time it takes to generate the profit. For Lewis, as well as Marx, Smith, and a lengthy list of other economists, capitalists, and lay people, the role of the factory in the economy was to automate labour enough (through machines, division of labour, or machines and division of labour) that the numerator of the above equation grew whilst the denominator diminished, thus increasing the value of P. Factories could do this in a way that farms could not, the logic goes, because machines in factories and work processes can be sped up and innovated on, whilst farms are subject to nature. You cannot, one would assume, speed up the rate at which a potato grows to maturity, and even if you did, it is still ultimately just a potato. There is no potato 2.0 that you can get people queueing around the corner for. (Of course, here we can argue that agricultural processes can indeed be refined, and modern watermelon, for example, has more fruit than rind, especially compared to older watermelons, or that modern bananas are a great deal larger than their pre-colonial counterparts, etc, etc, but that is beyond what many of these fellows knew).
Indeed, when one looks at the economic history of Britain, Germany, and the US in the 19th and early 20th centuries, one would certainly walk away with the assumption that factories were indeed drivers of economic progress. Not only for the obvious surface level reasons, namely 'futuristic' look of machine-driven assembly, nor because of the vast quantity of product these factories were outputting (although this was a key development for socialists, as it meant more resources for more people) as well as the increasing complexity of the output. Mass produced paper was being fed into typewriters, for example. The other reason, of course, to view factories as the sign of economic progress was the sheer amount of waged labour they require to run.
Long time readers of either this blog or the wider discipline of economics are, no doubt, aware there are considerable caveats to this last point. First, of course, is that just because the workers in the factory had a job did not guarantee that the job was well paying, nor even that it paid enough to meet the cost of living. Neither health and safety nor child labour laws existed for much of the 19th century, and so the factories also ran up a rather moribund body count right at home, without even considering where the factories got the raw materials necessary to function. (See last week's entry for that). In the present era, when we do have unions (even if they were weakened by Thatcher and anti-union rhetoric of the 1980s spread by long-time friend of Western regression Rupert Murdoch), employment laws, and health and safety, the truth is the modern labour demand for a factory has diminished, as whilst the 'dream of the workerless factory' hasn't yet been realised, the truth of the matter is the production line for a modern Ford Focus requires considerably less human interaction than the production line for the Ford Model A did. Truth is, when thinking about modern 'industrial policy', plopping a factory down isn't the guaranteed job creator that it had been in the 19th and much of the 20th century.
As the son of a steel worker, I'm actually somewhat fine with that. Even with the modern health and safety standards we expect our employers to enforce, even if noted right-wing whinge bag and 'farmer' Jeremy Clarkson likes to complain about it, H&S might considerably reduce the number of fatalities and other causalities in the modern factory, but it doesn't eliminate them. Factories are inherently dangerous places. I don't think it should be controversial to say that, where possible, it's preferable to have a machine doing potentially life threatening labour over a human, as the machine is considerably more expendable. The reason the machine might feel threatening here, however, has less to do with fears of the terminator and more to do with fears of a destruction of livelihoods and communities.
That last one is the big one that I think I've avoided thus far, maybe it's because whilst I currently live in a city both large enough and old enough to have its entire history or culture defined by a singular industry, two of the four cities that have shaped my life weren't so lucky. Hence, I carry the cultural baggage and trauma of communities that were once defined by industries that had since moved on, and struggled to find new meaning or purpose in their 'post industrial' eras. Like I said, my dad worked in a steel factory, that factory doesn't exist any more, and my dad spent the better part of the 1990s unemployed as he and thousands of his former coworkers struggled to transition to a new career. This was made difficult due to the fact that many of the smaller local businesses that had built themselves to cater to the steel mills also had to shut, due to diminished demand, causing considerably more unemployment. Kids growing up in the north of England post-Thatcher or in the 'rust belt' of the US post-Reagan, or in similar economic zones across the West have should have no difficulty understanding what Marx meant when he discussed how capital uses the 'army of surplus labour' to diminish wages, as like me they likely watched countless former factory workers who had worked and fought hard for decent wages lose those jobs and settle for other work at reduced wages. Of course, thousands of former coders are about to find themselves living a similar experience, part of why the cries of 'teach them to code' that certain members of the capitalist class currently make doesn't land as well as they'd hoped.
But you'll notice that there were thousands of people laid off, and countless small businesses built with the understanding that they were catering either to the factory or the workers for the factory. It is those thousands of people and the people who make their living from the small businesses that make up communities. Cities even, and when enough of those communities and cities get disrupted by the closure of enough factories, you get entire disaffected regions. Those disaffected regions tend to become regions of political unrest. Historically, the north of England was home to considerable socialist movements, today there is still considerable left-wing movement, but it is also the focus of much of Britain's modern far-right. Again, we find similar stories across so-called 'developed' countries, whether it's Alberta in Canada or the East of Germany. We also find similar stories in the beginning of industrialisation, when the combination improved farming techniques and technologies and the emergence of factories led to the destruction of countless farming communities and the agricultural lifestyles across Britain, Europe, and the US.
When I was younger, studying in Chicago, hearing this narrative I used to think, 'oh that's just the cost of progress', and 'oh, people should be retrained', etc. etc. One of my teachers used to suggest that 'oh people should just move'. Of course, when looking at mass migration of British people over the course of the 18th century this is easy, as the migrants in question are all dead, and all that remains are statistics, stories, and a considerable amount of art mourning a lost version of Britain. (We all know I hate Blake).
Some of it is the cost of progress, there is a seed of truth in this broad hand waving of valid concerns of people. The past is indeed 'always another land', that exists entirely in memory, and memory is an imperfect vessel. My grandfather's Britain is gone, it is never coming back. In many ways that's good, it was a land of even more racism, where it was illegal to be gay, where the Irish still weren't white, where women couldn't open banking accounts, and I could go on and on about the myriad of things wrong with early 20th century Britain. There were also good things, of course, around the arts, the engineering, and the eye towards social progress and large viable left-wing movement, and of course infrastructure was still being built and the NHS was being founded and well funded, free university after the war, good social housing, and a bunch of other stuff we lost to Thatcher.
But there is an additional kind of destruction to communities that the logic of capitalism brings with it, that made the impacts of both the initial industrialisation and the later deindustrialisation harsher than was necessary. Here I'm referring, again, to the destructive twin narratives of 'comparative advantage' and harsh individual responsibility. This is the idea that some labour is inherently more valuable to society than others, and poverty is a result of poor individual moral fibre. The kind of mentality that Max Weber referred to as the 'protestant work ethic', and the kind of individualistic cultural atomisation that alienates individuals from communities and eventually leads Margaret Thatcher to proclaim that 'there is no society'. This is the side effect, either intended or unintended of trading village level barter economies with informalised exchanges of labour for access to the village's resources for modern formalised wage labour, where the only remaining mechanism for the trade of good and services is abstracted capital, either has presently held in the form of cash, or promised in the form of credit.
This 'innovation' is what originally created the 'army of surplus labour' in the countryside, as informal arrangements for the care and shelter of people were displaced by demands for capital, driving the migration into the cities in the first place. If a beggar in the city or the countryside was destitute, it was quickly assumed they were a lazy drunkard, rather than a person who hadn't been able to navigate this rapid societal change and had alcohol as the only remaining support structure left. There was no analysis of the ways in which the rapid industrialisation of Britain had displaced centuries of understanding and local economies built around agriculture, rather a narrative emerged of the 'fit, responsible, God-fearing, industrious protestant' who had the intelligence and cunning to navigate this new world, this new Britain, and the vast criminalisation of those 'left behind' under the poor laws and villainises them through religion and other societal structures. 'Good' Britons were industrious and 'self made', the rest must be drunken idiotic rural peasants who don't know what's good for them, or worse, Irishmen. It is your God-given duty as a 'good' Briton to make yourself exploitable to capital, and in exchange you will be given enough capital to survive in this new order.
Again, I want to emphasise that I don't like Blake's work. I am not a 'luddite' in the modern sense of the term. This is not me romanticising a long-lost agrarian Britain that I think we ought to return to. Even today, I'm much more spaceships and lasers than sword and sorcery in my fictional media consumption. Medieval Britain was not a good place, and I am glad that the bourgeois displaced the aristocracy in political importance. Factories are, in other words, capable of good things. I'm just reminding you that the capitalist mode of production was a series of choices made by, amongst other groups, the British bourgeois in the 17th, 18th, and 19th centuries. It was not a 'natural order of things', rather a series of political choices and actions, often enforced with violence (the crushing of the Jacobites, the Civil Wars, the crushing of the Luddites, etc., etc.). Much like Marx, or Graeber, or Rodney, or Harvey, or any of the many other academics I've covered here it's important to understand that capitalism, including the form, function, and design of factories under the logic of capital, had to come, and because it had to be designed, invented, and implemented, it can be replaced.
What does this tell us about the role of factories today? As I've mentioned before, there has been considerable debate amongst Marxists, starting with Marx and Engels themselves, about whether or not an economy needs to go through a capitalist phase before going into socialism. Engels, when writing to some pre-Bolshevik Russian socialists, had optimism that since capitalism hadn't embedded itself in Russia to the extent it had in Britain and Germany that perhaps Russia could skip it altogether and avoid having to experience the violent rise and eventual replacement of the bourgeois class. Of course, the flow of Russian history went differently, and by the time of the 1917 revolution, Russia had enough of a bourgeois that there was a lengthy and brutal civil war, about which considerably more ink has been spilt than I am willing to dedicate here.
But let's reassess where we are, regardless of Russia over a century ago. I restore old computers in my spare time, and I also contribute, when and where I can, to open source computing projects. I also have a severe addiction to building strange little machines using the Raspberry Pi. As such, it should be to the surprise of no one that I've also picked up a fondness for 3D printing. Of course, as a fan of Star Trek, it's fun to pretend that these remarkable machines are replicators despite them being considerably slower, physically limited, and smelling considerably different than replicators as depicted in The Next Generation, Deep Space 9, and Voyager. 3D printers are, of course, extremely primitive compared to both their Star Trek counterparts and the sort of kit we find in modern factories. We can joke about turning up digital piracy all the way to printing a car, but the expense of getting a 3D printer even close to that point would out weigh the cost of just buying the damn car. Despite this, other facets of modern automation have made the modern factory less of a jobs creator, at least compared to the heights of manufacturing in the West in the early 20th century.
This isn't to say we shouldn't start building more factories in places that aren't China. Indeed, China's current role as the 'factory of the world' is an indictment on the 'logic of global capital' as well as the failings of 'socialism with Chinese characteristics'. As I've stated before, we should all be inherently sceptical of any ideology that revolves around nationalism, and proper socialism doesn't lend itself to pairing with nationalism. The current concentration of factories in China is a by-product of the monopolisation of manufacturing across industries by a handful of corporations mixed with a certain amount of the inevitable 'group think' and subsequent assumptions that come with elite executives all coming from a hand full of the same business schools, and all other business schools emulating those elite schools to draw students in our modern highly marketised academic system. The other side of monopoly that is seldom talked about in neo-liberal and neoclassical schools of economic thought is of course that they also become monopoly employers, able to set terms and conditions of employment in restrictive ways, move employment to where they deem it most cost effective (at present, China) and concentrate all manufacturing at a few key sites, reducing global available employment.
As 3D printing and other manufacturing technologies improve, even these centralised factories will see diminished labour demand. Gone are the days of Patrice Lumumba when we could hope to plop down a few factories across Congo and assume it would uplift the workers within, especially as Keynesian era labour protection laws are constantly being undone or bypassed. Frankly, even Lumumba wasn't able to be successful, since the Belgians/Americans killed him for trying to move Congo out of its position as a raw materials colony.
I think the gist of the blog today is three-fold: first, manufacturing is important for the economy, as in order to share surplus value with the masses, there has to be enough surplus value to go around, so to speak. This is why Lenin and Mao both pushed for industrialisation in their respective post-revolutionary societies, in order to break capital's monopoly on mechanised production in Britain, Germany, and the US. This is also why so many post-independence African and Asian leaders similarly tried to do industrialisation as well, but their desire to 'work with' the global bourgeois undermined their efforts to produce local economic independence, as demonstrated by Walter Rodney. Of course, in many instances their more radical counterparts who sought to break with the West met violent ends, as we saw in Ghana, Nigeria, Congo, and many, many, many, many other examples throughout the Cold War era, since capital does have a history of using violence to both introduce and assert itself, especially in the colonial and post-colonial context.
Second, it isn't just automation costing workers jobs, it's the monopolisation of the manufacturing process by a few key capitalists in geographically isolated regions, driving unemployment everywhere else to push the 'reserve army of labour' into other industries and sectors, so as to drive down the cost of labour in those. If everyone learns to code, then the wages of the coder will go down. This is the desirable outcome for the heavily monopolised IT corporations, has their supply chains work in such a way that the most expensive part today is the generation of intellectual property, as such in order to maximise profit, it is in the interests of say, Apple Computer, to keep the cost of labour in African mines as low as possible, to keep the cost of raw materials low, keep the cost of labour in China low, to keep the manufacture of the physical components of the computer low, and drive down the wages of coders in the US by pushing former American factory workers to code instead, reducing the cost of waged labour for as much of the chain as possible, in order to extract profit for investors and executives who in reality contributed nothing of value to the manufacture of an iPhone.
Third, the labour demand for manufacturing is likely to continue to go down, its decreasing significance in the global economy was already being noted back in the 1960s, which is one of the prompts that lead to the introduce of minimum wage laws in a number of jurisdictions, to account, in a Keynesian way, for the diminishing number of hours available for labour. The minimum wage's relationship with Keynesian economics is also why in most places it has completely and utterly failed to keep up with the cost of living. Much of our current obsession with manufacturing is tied to 'supply-side' understanding, which leaves us with an immense surplus of absolute nonsense, up to and including Funko Pops. Instead of manufacturing what we need, we incentivise the factories to keep churning out whatever they can for whatever they want, and this is not only leading to a surplus of goods that will never be consumed, but is also killing our planet. (He says as it hits 35 degrees in London, again). We need to reconsider manufacturing as a demand-side process, and as a global process, and yes, make sure the owners of the means of production are the workers, and not a small cabal of global elites that all party on questionable private islands.
For a variety of reasons, the future will not look like the past we knew, it is time for imagination and optimism.
Author's note: for a while I'm going to be slowing down to one post a week, as other projects and work begin to pick up in intensity. Watch this space!
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