Komrade Karl Marx was a man far ahead of his times. But he was also a creature of his times. Moreover, he most certainly didn’t have all the answers nor claim to either. His soulmate Frederich Engels, who also bankrolled him for most of his life (and beyond), did a lot of the leg work and generally tried to keep the old guy’s ideas on track. Many of the fundamental ideas about the relationship between economics and politics contained in the vast amounts they wrote, have become an intrinsic part of virtually every society on our planet (though few would admit it).
Karl’s ideas on the future of technology were, from an economist’s perspective anyway, right on target. He saw the ultimate contradiction of technology’s ability to ‘capture’ living labour in machines (so-called dead labour), leading to the situation where capital would cease to exist. I first came to the realisation of what this really meant when I first started looking at computers and capitalism back in the early 80s. I named this this new kind of capital, Information Capital. Now it’s called Intellectual Capital (IC) but it’s the same concept. The Brain commodified.
One of the main criticisms I got from left intellectuals then was that Intellectual Capital didn’t actually ‘exist’. In other words, unlike Finance Capital which could be measured as property, stocks and bonds and so on, IC had no equivilent means of being measured. For example, ideas don’t necessarily get used up like products and hence more produced. In fact, increased use of an idea can either add or take away value from the idea. Classical marxist theory just can’t deal with this concept, it’s too slippery. But then again, neither can capitalist theory deal with the concept either. The reason it’s a slippery concept to grab hold of is because it challenges traditional ideas about value, whether these be from the left or the right.
Our notions of value are based upon human labour, values that are quite arbitrary, in that the real value of anything is buried far back in human history, probably as far back as our beginnings as a species. Many attempts have been made to establish a standard for value, for example R. Buckminster Fuller’s ‘Energy Slave’. Fuller assumed that most human labour was done manually so he based his Energy Slave on how many calories were needed for a person to lift one kilogram, one meter in the air. These calories can be translated into the amount of food needed to produce the calories. But it’s still kind of arbitrary; in the real world, labour is performed by a combination of machine and human work and furthermore, it doesn’t measure knowledge as a means of storing value (eg when to plant or harvest crops). Nor does it measure the cost of Nature.
Inherent in the idea of dead labour however is Intellectual Capital, that is, processes which essentially exist only in the brain or some kind of analogue of the brain in action, for example a computer. In the age of the machine, intellectual processes ended up in machines that were analogues of human hand/eye coordination, machines that made physical products, guided by humans. In the era of Intellectual Capital, ideas end up in machines that mimic aspects of thinking, which at the end of the day, underlies all physical production and in turn, end up guiding production, only now, machines guide production as well.
But it’s possible to imagine an economy where living labour supplies such a tiny percentage of the overall production process or its costs, that money (as capital) ceases to be meaningful or to have any intrinsic value, based upon what it ‘costs’ to make something or increasingly, do something. Labour costs are in fact the only element of production from which one can extract a surplus, or profit, as machines are intrinsically incapable of generating a profit because machines don’t get paid wages.
For example, in the US, telecommunications costs are now so low that the Telcos had to find some other way of making money for their shareholders with the assets they possessed ( computer networks, exchanges, satellites, cable, dishes and so on). So they purchased the content that travelled across their networks. Okay, so far so good. Now we have increasing monopolisation of the economy as IC becomes essential to the actual workings of the economy, whatever it’s producing. Telcos as privately owned institutions have bought some more time for their shareholders.
But when you think about it a bit more closely, you see that Komrade Karl was right about the nature of the revolution in production having as it’s ‘ultimate’ resolution the complete socialisation of labour. But in order for this to happen globally, capitalist production relations had to mature to the point whereby they reached a complete monopolisation of all the stages of the production process and spread to every significant area of production. To do this we needed the Information Technology revolution. But for Komrade Karl, the machine was the ultimate in the production process, he was a creature of his times after all, he could never have foreseen the impact of the computer even though he hinted at it in some of his writings.
Until quite recently, the state performed the function of building and financing national assets eg, roads, telecommunications networks, electricity grids etc. Private capital was incapable and most importantly, unwilling to perform this role, pretty well everywhere except in the US. But even in the US, the state subsidised most of the revolutions in production from WWII onwards largely because of the Cold War: the integrated circuit, the satellite, lasers, optical fibre, missiles and of course, underlying it all, mathematics and physics through the universities and research centres.
The end result of this process is the transfer and takeover of research and development from the state to private companies. The state finds itself incapable and increasingly unwilling to support cutting edge research except in key areas or in countries where the citizens have greater control over the state and its activities. So from one perspective, development as we need it (skills and a cutting edge IT infrastructure) can only come from the private sector.
If we take the privatisation of Telcom as an example, it will go through a number of stages. First it will list on the stock exchanges. Then, big transnational telcos will buy stock and eventually, Telkom will be part of a global telecommunications conglomerate. It’s inevitable because the technology and the global economy demands complete integration on a global scale.
Can increased privatisation ultimately lead to socialisation? I think it can but not by itself, nothing is inevitable. It needs people to conceptualize alternatives and to continue to demand for justice, dignity and human rights, including decent working and living conditions, access to basic amenities and so on. But it needs a framework which makes these demands realistic. So it can be argued that privatisation can lead to increased socialisation.
One example is the state’s privatisation of Telkom. Privatisation should be made conditional upon a certain percentage of its turnover or of its investment targeting education and a real community network infrastructure being put in place eg high speed cable networks in all communities with microwave links between them. And do it in conjunction with state investment in education so the state can get educated too. The major hurdle we face, in fact any developing country faces, is the level of education of its citizens. Without a modern education not much is possible except the maintenance of subsistence levels of existence. And we’re lucky in South Africa, we have a pretty decent information infrastructure to start with.
The same should happen with Eskom. Recent advances in non-fossil fuel energy sources such as solar, wind and fuel cell technologies, enable us to decentralize energy production. The citizen could then become a supplier of electricity to the power company and in doing so, generate income for themselves. Hence a condition of privatisation should be investment in alternative energy sources and investment in decentralized power systems. The state should pass legislation that enforces these conditions. Computer companies are already producing their own power in the US because the national power grid is not reliable enough for IT companies (and even more so here). But the end result is the same, decentralisation of energy production. It also helps in reducing global warming.
So what is the ultimate form of the complete socialisation of labour? Basically a few, giant transnational companies that have essentially merged through the creation of joint ventures and the supply chain process. This process is most advanced in the telecommunications and entertainment industries but it’s also at work in the transportation and electronics industries. So rather than compete to hold down costs, they cooperate, (so much for the market!).
At the same time, it’s becoming increasingly difficult to increase profits from this process. In fact, over time, profits actually decrease relatively speaking. The problem with IC is that it cannot be bent into shape by private capital, except in the short term as part of a traditional capitalist economy. Sooner or later, the contradictions of costs shrinking to zero will have to be resolved and private ownership is incapable of doing this, it has a different agenda.
For different reasons, it’s also why the socialist economies failed. They could not and would not, adapt to the new production processes, which demanded unfettered access to information and moreover, was driven by the imperative of innovation through a scientific and technological revolution. Had they had complete access to the latest technologies things may have turned out differently but I doubt it. What would have driven it?
Underlying my argument then, is the idea that capitalist productive relations have yet to mature to the point whereby we have a sufficiently developed economy (complete socialisation of the labour process) that creates the pre-conditions for the disappearance of Capital and hence of Capitalism as well.
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