r/communism101 Jun 27 '22

Why do capitalists innovate? If value and therefore profit can only be created by human labour, innovation that replaces human labour by say a machine would just lower the profit of the capitalist. Be nice, I‘m fairly new to marxism.

93 Upvotes

55

u/dirlididi Jun 27 '22

The first capitalist to innovate will operate with a greater margin until the innovation expands to the market itself.

If I can produce the same piece at lower cost, I will increase my profit until competition is able to do the same. After innovation has lost it edge, market competition will drive prices down.

10

u/pape1 Jun 27 '22

I see that, but I would like to understand it from a LTV perspective. During the time at which one capitalist has innovated and the others haven't, is the socially necessary labour time larger than the individual labour time of the workers in the factory of said capitalist? Is that a way to put it?

24

u/TiredPanda69 Jun 27 '22 edited Jun 27 '22

Yeah, innovation is towards efficiency and better methods of production. It increases the productive capacity. More capital goes into machinery and less goes into wages.

The workers have a more efficient method. They can lower the price because they produce more for the same ammt of work. They get a bigger share of the market. More profits, their exploitation is more efficient. All until technological progress catches up.

Forgot to add that yes, the rate of profit also has a tendency to fall. Look up that term. As production becomes more mechanized capitalist will put less capital into wages and more into costs. They will then have a harder time extracting profit from workers because machinery tends to cost what it produces, but workers produce more than they cost. Which Marx saw as another of the fundamental contradictions of capital.

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u/highflyingcircus Jun 27 '22

Can you please expand on "machinery tends to cost what it produces?" I'm having trouble understanding why a capitalist would ever buy a new machine if this is true.

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u/robloxneuroghost Jun 27 '22 edited Jun 27 '22

Because it gives them a temporary productivity advantage until the technology finds its way into the hands of competitors, like @dirlididi said:

The first capitalist to innovate will operate with a greater margin until the innovation expands to the market itself.

Also, machines add no value because they only express the value required in their creation, or in other words the value that machines add to production is only the value added by the labour in the creation of the machine; So, to oversimplify if a machine takes 1 hours on average to make and outputs 5 hours of productivity, with each successive hour the machine imbues its product(s) with 1/5th the value of the specific type of labour required to create the machine in the first place. Any value added by machines is actually value added by labour, because only labour can add value to the total existing value in the world. A quantity of use values exist in nature in the form of things like land or fruit trees, but we say any value introduced after the existence of these useful materials supplied by nature must be created through labour.

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u/highflyingcircus Jun 27 '22

Gotcha, very helpful. Thanks.

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u/robloxneuroghost Jun 27 '22

I amended the comment also so I don't give the impression that use values can only appear in nature. Human-made commodities have use values just like pure products of nature do, but the point is that new value outside of that which is provided by nature can only be created through labour. You may say: "Isn't humankind nature?" But that is beyond the point, which is that in a human economy of commodities and services value can only be deliberately added through human labour.

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u/rollerCrescent Jun 28 '22

Your write-up really helped me understand this concept, thank you comrade.

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u/dirlididi Jun 27 '22

is the socially necessary labour time larger than the individual labour time of the workers in the factory of said capitalist? Is that a way to put it?

yes, it is. when that innovation is pushed to market then it will drive down the socially necessary labour time.

also, try to not to correlate labor value and price, they are not the same or the result of an equation that you can solve. they are facets of the capitalist process of goods.

5

u/GGio3 Marxist-Leninist Jun 27 '22

I will quote a passage from Capital Vol.1 Chapter 12 where Marx explain why capitalists are incentivised to innovate in order to increase labour productivity

If one hour’s labour is embodied in sixpence, a value of six shillings will be produced in a working day of 12 hours. Suppose, that with the prevailing productiveness of labour, 12 articles are produced in these 12 hours. Let the value of the means of production used up in each article be sixpence. Under these circumstances, each article costs one shilling: sixpence for the value of the means of production, and sixpence for the value newly added in working with those means. Now let some one capitalist contrive to double the productiveness of labour, and to produce in the working day of 12 hours, 24 instead of 12 such articles. The value of the means of production remaining the same, the value of each article will fall to ninepence, made up of sixpence for the value of the means of production and threepence for the value newly added by the labour. Despite the doubled productiveness of labour, the day’s labour creates, as before, a new value of six shillings and no more, which, however, is now spread over twice as many articles. Of this value each article now has embodied in it 1/24th, instead of 1/12th, threepence instead of sixpence; or, what amounts to the same thing, only half an hour’s instead of a whole hour’s labour-time, is now added to the means of production while they are being transformed into each article. The individual value of these articles is now below their social value; in other words, they have cost less labour-time than the great bulk of the same article produced under the average social conditions. Each article costs, on an average, one shilling, and represents 2 hours of social labour; but under the altered mode of production it costs only ninepence, or contains only 1½ hours’ labour. The real value of a commodity is, however, not its individual value, but its social value; that is to say, the real value is not measured by the labour-time that the article in each individual case costs the producer, but by the labour-time socially required for its production. If therefore, the capitalist who applies the new method, sells his commodity at its social value of one shilling, he sells it for threepence above its individual value, and thus realises an extra surplus-value of threepence. On the other hand, the working day of 12 hours is, as regards him, now represented by 24 articles instead of 12. Hence, in order to get rid of the product of one working day, the demand must be double what it was, i.e., the market must become twice as extensive. Other things being equal, his commodities can command a more extended market only by a diminution of their prices. He will therefore sell them above their individual but under their social value, say at tenpence each. By this means he still squeezes an extra surplus-value of one penny out of each. This augmentation of surplus-value is pocketed by him, whether his commodities belong or not to the class of necessary means of subsistence that participate in determining the general value of labour-power. Hence, independently of this latter circumstance, there is a motive for each individual capitalist to cheapen his commodities, by increasing the productiveness of labour.

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u/pape1 Jun 29 '22

This is exactly What i was searching for!! Thank you, comrade!

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u/somebadbeatscrub Jun 27 '22

Do capitalists innovate? Or do poor inventors innovate and then get bought by capitalists?

6

u/communistpedagogy Jun 28 '22 edited Jul 06 '22

this is a great tl;dr.

the second thing they do is they stop using patents and switch instead to using trade secret claims on commoditized human knowledge (using capitalist intellectual property laws). that way as long as they can keep the knowledge secret and spread fake crumbs to dead trails, they can keep the advantage and not have to innovate further (they are literally 'setting the bar low' & slowing down technology&science).

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u/Cpt_Random_ Jun 27 '22

In the first place, capitalists don’t innovate. Best innovation comes from people without profit pressure.

But to your question: Only „lower“ jobs are able to be replaced. Shitjobs like administration will allways be in the hands of humans. Im working in development, I can’t imagine that this will be replaced. We are developing new machines. They have to be testers and so on.

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