Automation needs to be tackled with the economics of the 19th century

Marx versus the robots.

Since covering the strangely unimaginative way the economics establishment treated the effect of automation on the economy, I've been looking for economists who do seem to get it.

Responding to a piece by Paul Krugman (a back-of-the-envelope demonstration of how neoclassical models could show technological improvements leading to a reduction of the real wage), Fred Moseley, Professor of Economics at Massacheusettes' Mount Holyoke College, gives an overview of the Marxist approach to the problem:

Marx’s theory predicted in the early days of capitalism that technological change would tend to be labor-saving… and this labor-saving technological change would cause increasing unemployment (the “reserve army of the unemployed”) which in turn would put downward pressure on wages and the wage share of income (Capital, Volume 1, Chapter 25). He called this important conclusion “The General Law of Capital Accumulation” (the title of Chapter 25). One does not have to use the very dubious marginal productivity theory to explain these important phenomena. Marx’s theory provides a perfectly adequate explanation without the extremely problematic concepts of marginal products of labor and capital.

Marx is obviously relevant to the end stage, of a world in which automation replaced the bulk of work. That world would struggle to continue to arrange things along a capitalist order, as Noah Smith's contortions demonstrated. Ownership of the means of production — the robots, algorithms, computers and everything else replacing human labour — becomes more and more important the closer to that stage we reach.

Moseley's point is that Marx is probably relevant to the whole thing far earlier. The labour theory of value (Marx's key economic idea, that value — which is distinct from "price" — is determined exclusively by the human labour a good takes to create) has always been a lens through which technological improvement in the means of production leads, eventually, to immiseration of the labourer.

(The flip side of such an argument is that immiseration is offset by the fact that technology also reduces the amount of labour required to live a good life. The balance between those two tendencies is, in essence, the answer to the question of whether or not capitalism is sustainable or not.)

No matter how accurate it may have been in this situation, it will take a long time for most people to begin taking the Marxist economic analysis seriously. (Part of that might be that it's got that frightful déclassé word "Marxist" in it.) But if economics doesn't adopt some of its lessons, it seems doomed to spend the next decade reinventing it from scratch.

A man poses in front of a bronze statue of Karl Marx and Friedrich Engels in Berlin. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Jeremy Corbyn challenged by Labour MPs to sack Ken Livingstone from defence review

Former mayor of London criticised at PLP meeting over comments on 7 July bombings. 

After Jeremy Corbyn's decision to give Labour MPs a free vote over air strikes in Syria, tonight's Parliamentary Labour Party (PLP) meeting was less fractious than it could have been. But one grandee was still moved to declare that the "ferocity" of the attacks on the leader made it the most "uplifting" he had attended.

Margaret Beckett, the former foreign secretary, told the meeting: "We cannot unite the party if the leader's office is determined to divide us." Several MPs said afterwards that many of those who shared Corbyn's opposition to air strikes believed he had mishandled the process by appealing to MPs over the heads of the shadow cabinet and then to members. David Winnick declared that those who favoured military action faced a "shakedown" and deselection by Momentum activists. "It is completely unacceptable. They are a party within a party," he said of the Corbyn-aligned group. The "huge applause" for Hilary Benn, who favours intervention, far outweighed that for the leader, I'm told. 

There was also loud agreement when Jack Dromey condemned Ken Livingstone for blaming Tony Blair's invasion of Iraq for the 7 July 2005 bombings. Along with Angela Smith MP, Dromey demanded that Livingstone be sacked as the co-chair of Labour's defence review. Significantly, Benn said aftewards that he agreed with every word Dromey had said. Corbyn's office has previously said that it is up to the NEC, not the leader, whether the former London mayor holds the position. In reference to 7 July, an aide repeated Corbyn's statement that he preferred to "remember the brilliant words Ken used after 7/7". 

As on previous occasions, MPs complained that the leader failed to answer the questions that were put to him. A shadow minister told me that he "dodged" one on whether he believed the UK should end air strikes against Isis in Iraq. In reference to Syria, a Corbyn aide said afterwards that "There was significant support for the leader. There was a wide debate, with people speaking on both sides of the arguments." After David Cameron's decision to call a vote on air strikes for Wednesday, leaving only a day for debate, the number of Labour MPs backing intervention is likely to fall. One shadow minister told me that as few as 40-50 may back the government, though most expect the total to be closer to the original figure of 99. 

At the end of another remarkable day in Labour's history, a Corbyn aide concluded: "It was always going to be a bumpy ride when you have a leader who was elected by a large number outside parliament but whose support in the PLP is quite limited. There are a small number who find it hard to come to terms with that result."

George Eaton is political editor of the New Statesman.