Honesty compels me to acknowledge that, in glancing over what I have written thus far about capital(ism), I do sound a little like Lee Corso doing his shtick on ESPN College GameDay. "Team Marx versus Team Mainstream! David versus Goliath! Don't miss this showdown for the ages!"
So let me say that on one crucial issue Marx and the mainstream are in complete agreement. What is it that brings peace in the valley of warring economists so that the lion shall lay down by the lamb, to pinch a lyric or two from Thomas A. Dorsey's gospel classic?
Productivity.
Marx puts his value theory to work in explaining why labor-saving technology is a necessity under capital, and how individual capitalists internalize this necessity through the coercive laws of competition. He understands technology in the broad sense to encompass both the material means of production, machinery above all, and the organizational forms of production.
To see how Marx builds his argument regarding technology and competition let's return to surplus value, the alpha and omega of the capitalist mode of production. Marx divides the working day into two segments: "necessary labor time" refers to those hours of the working day during which workers produce the value equivalent of their labor power; "surplus labor time" refers to the remaining hours, when workers are producing surplus value for the capitalist.
What capitalists want is all the surplus labor time that they can get. But to gain access to it, they must first pay workers for their necessary labor time, which ends up not as profit in the capitalists' pocket but as wages that workers will spend on what they need to live. If you happen to be a poker player, the choice facing the capitalist will sound all too familiar: to get into the game with a chance of winning the pot, you must ante up. For the capitalist necessary labor time is the ante.
Minimizing necessary labor time and maximizing surplus labor time is in the best interest of capitalists. They can do this in two ways, by extending the length of the working day beyond necessary labor time or by reducing necessary labor time, through the adoption of labor-saving technology that lowers the value of labor power. The first strategy aims to produce what Marx calls "absolute surplus value," the second "relative surplus value."
The drive for absolute surplus value took centerstage during the early days of industrial capitalism. Manchester factory owners were notorious for the long hours they squeezed out of their workers, women and children not excepted. As Marx shows, it finally took a combination of militant working-class struggle, humanitarian middle-class concern and state intervention to prevent individual capitalists, who were acting out of self-interest and in accordance with the coercive laws of competition, from canibalizing not only the lives and bodies of their employees but also the enabling conditions of their own reproduction as a class. Left to their own devices, individual capitalists seemed hellbent on destroying the foundation of the capital-labor relation. So, in 1847 the British Parliament passed the first Factory Act limiting the working day to 10 hours for women and young people.
The history of capitalism is littered with examples of capitalists having to be saved from their own self-destructive behavior by public authorities who umpire the class struggle on behalf of capital as a whole. The regulation of the working day created a space in which a broader sense of class consciousnesses could take root, at least among some industrial capitalists. To maintain productivity levels, employers were increasingly willing to allow their workers a certain amount of free time for recreation, self-improvement and what might be called metabolic restoration. Likewise, as a matter of enlightened self-interest it made sense to give workers enough time to manage the basics of biological and social reproduction at home, otherwise where would the future generation of wage earners come from?
As the practical and political limits of absolute surplus value sunk in, the advantages of relative surplus value came into sharper focus. Shortening necessary labor time required a reduction in the value of labor power which, as we have noted, was determined by the value of the wage goods consumed by the working class. Labor productivity gains in those branches of industry specializing in the production of wage goods thus translated into a decline in the value of labor power, an increase in surplus labor time and a growth in the mass of relative surplus value across all sectors of the economy.
For Marx the production of relative surplus value raised the troublesome question of competition, a subject he generally avoided on the grounds that competition could never determine the laws of motion of capital, only enforce them. But in making the case for relative surplus value he had to explain why an individual capitalist would go to the trouble and expense of rolling out a brand-new, labor-saving innovation only to turn around and share it with the competition. This seems irrational and self-defeating. After all, capitalists are in the business of making money not friends.
Marx's answer is this: individual capitalists are short-termers who make their investment decisions in the here and now. Any new technology that promises to give them a competitive edge, no matter how ephemeral, must be acted upon. The capitalist who fails to seize the opportunity to increase market share by adopting an innovation that brings down labor costs will be left behind as others jump at the chance to upgrade their production methods. That the technological advantage won't last forever is neither here nor there; nothing lasts forever in the competitive market.
Let's imagine that an innovator introduces a technological change in the production process that lowers labor costs. What happens next? The productivity of her workforce will rise compared to that of other workforces producing the same commodities. Remember that the value of these commodities is equal to the average amount of labor time required to produce them. Thanks to her new technology, the innovator is now producing commodities that contain less labor time and therefore less value than the social average. This difference between the individual value and social value of the commodity is "extra" surplus value for the innovator. She can sell her commodity below the market price and still make a profit, and that's what she will do for as long as she can.
But this advantage will vanish before long. The same competitors who have been caught flat-footed using the old technology will eventually notice that their profit margins are starting to dip as the growing supply of cheaper commodities made possible by the new technology drives down the average market price. They will respond by storming the citadel of innovation. The labor-saving method that for a time generated an extra surplus value for the fortunate trail-blazer will soon spread far and wide, becoming the new normal in this line of production. Market conditions will then settle down until the next leapfrogging innovator arrives on the scene with yet another labor-saving method which will set off a new round of intra-class scrambling for technological advantage.
In their quest for relative surplus value and in compliance with the coercive laws of competition, individual capitalists take on board the imperative of technological change. Labor-saving innovation is thereby baked into capital's DNA.