Friday, March 18, 2016

Marx’s Capital, Volume 1, Chapter 15: A Critical Summary, Part 2

Chapter 15 of volume 1 of Capital is called “Machinery and Large-Scale Industry” and examines the role of machines in developed capitalist production in the 19th century.

Part 1 of this review is here. This is Part 2.

Marx divides the chapter into ten sections:
(1) The Development of Machinery

(2) The Value transferred by the Machinery to the Product

(3) The Most Immediate Effects of Machine Production on the Worker

(4) The Factory

(5) The Struggle between Worker and Machine

(6) The Compensation Theory, with Regard to the Workers displaced by Machinery

(7) Repulsion and Attraction of Workers through the Development of Machine Production, Crises in the Cotton Industry

(8) The Revolutionary Impact of Large-Scale Industry on Manufacture, Handicrafts and Domestic Industry

(9) The Health and Education Clauses of the Factory Acts.

(10) Large-Scale Industry and Agriculture.
Critical summaries of the chapter sections (6) to (10) follow.

(6) The Compensation Theory, with Regard to the Workers displaced by Machinery
Marx disputes that machines allow a freeing up of capital to employ displaced workers and argues that new jobs making machines will not compensate for the loss of jobs by the use of such machines (Marx 1990: 565–566).

As Marx sees it, the actual state of affairs is as follows:
“The labourers that are thrown out of work in any branch of industry, can no doubt seek for employment in some other branch. If they find it, and thus renew the bond between them and the means of subsistence, this takes place only by the intermediary of a new and additional capital that is seeking investment; not at all by the intermediary of the capital that formerly employed them and was afterwards converted into machinery. And even should they find employment, what a poor look-out is theirs! Crippled as they are by division of labour, these poor devils are worth so little outside their old trade, that they cannot find admission into any industries, except a few of inferior kind, that are over-supplied with underpaid workmen. 1 Further, every branch of industry attracts each year a new stream of men, who furnish a contingent from which to fill up vacancies, and to draw a supply for expansion. So soon as machinery sets free a part of the workmen employed in a given branch of industry, the reserve men are also diverted into new channels of employment, and become absorbed in other branches; meanwhile the original victims, during the period of transition, for the most part starve and perish.” (Marx 1906: 481–482).
The catastrophic nature of machinery is summed up in this way:
“Since therefore machinery, considered alone, shortens the hours of labour, but, when in the service of capital, lengthens them; since in itself it lightens labour, but when employed by capital, heightens the intensity of labour; since in itself it is a victory of man over the forces of nature, but in the hands of capital, makes man the slave of those forces; since in itself it increases the wealth of the producers, but in the hands of capital, makes them paupers—for all these reasons and others besides, says the bourgeois economist without more ado, it is clear as noonday that all these contradictions are a mere semblance of the reality, and that, as a matter of fact, they have neither an actual nor a theoretical existence.” (Marx 1906: 482).
However, Marx admits that new workers are employed in making machines and providing the raw materials for the increased production by automation (Marx 1990: 570–571).

The division of labour is also increased:
“In proportion as machinery, with the aid of a relatively small number of workpeople, increases the mass of raw materials, intermediate products, instruments of labour, &c., the working-up of these raw materials and intermediate products becomes split up into numberless branches; social production increases in diversity. The factory system carries the social division of labour immeasurably further than does manufacture, for it increases the productiveness of the industries it seizes upon, in a far higher degree.” (Marx 1906: 486).
Marx’s final paragraphs in this section are shot through with severe problems.

According to Marx, large-scale industry tends mainly to increase the production of luxury goods:
“The immediate result of machinery is to augment surplus-value and the mass of products in which surplus-value is embodied. And, as the substances consumed by the capitalists and their dependants become more plentiful, so too do these orders of society. Their growing wealth, and the relatively diminished number of workmen required to produce the necessaries of life beget, simultaneously with the rise of new and luxurious wants, the means of satisfying those wants. A larger portion of the produce of society is changed into surplus produce, and a larger part of the surplus produce is supplied for consumption in a multiplicity of refined shapes. In other words, the production of luxuries increases. The refined and varied forms of the products are also due to new relations with the markets of the world, relations that are created by Modern Industry. Not only are greater quantities of foreign articles of luxury exchanged for home products, but a greater mass of foreign raw materials, ingredients, and intermediate products, are used as means of production in the home industries. Owing to these relations with the markets of the world the demand for labour increases in the carrying trades, which split up into numerous varieties.” (Marx 1906: 486).
We have here another travesty of history. As real wages soared and the purchasing power of workers rose even in the 19th century, much capitalist production was also devoted to producing commodities for the working class: mass consumer goods. So again Marx’s presentation of capitalism is a grossly unfair and one-sided caricature.

While industrial development increases the demand for public infrastructure (such as canals, docks, tunnels, bridges, etc.), Marx thinks that the total employment in this sector is “far from important” (Marx 1906: 487).

What is the most pronounced effect of large-scale industry? For Marx, it is the explosion in domestic service, which he sees as a form of slavery:
“Lastly, the extraordinary productiveness of modern industry, accompanied as it is by both a more extensive and a more intense exploitation of labour-power in all other spheres of production, allows of the unproductive employment of a larger and larger part of the working class, and the consequent reproduction, on a constantly extending scale, of the ancient domestic slaves under the name of a servant class, including men-servants, women-servants, lackeys, &c. …. If we deduct from this population all who are too old or too young for work, all unproductive women, young persons and children, the ‘ideological’ classes, such as government officials, priests, lawyers, soldiers, &c.; further, all who have no occupation but to consume the labour of others in the form of rent, interest, &c.; and, lastly, paupers, vagabonds, and criminals, there remain in round numbers eight millions of the two sexes of every age, including in that number every capitalist who is in any way engaged in industry, commerce, or finance. All the persons employed in textile factories and in mines, taken together, number 1,208,442 ; those employed in textile factories and metal industries, taken together, number 1,039,605; in both cases less than the number of modern domestic slaves. What a splendid result of the capitalist exploitation of machinery!” (Marx 1906: 487–488).
For Marx, domestic servants, government officials, priests, lawyers, soldiers etc. are all unproductive workers. This is an important point: a vast swathe of labour in modern capitalism, such as in the service industries, is dismissed by Marx as “unproductive.” Nevertheless, such service sector industries produce a profit and intangible output commodities.

So what is missing in Marx’s analysis is the explosion of middle class professionals, self-employed, and other service workers, which, owing to soaring real per capita GDP, often had high-paying jobs and also rising real wages. Also strangely missing are the growing class of skilled or semi-skilled self-employed workers such as tradesmen, who, if they run and work alone in their own businesses, cannot be subject to strict Marxist exploitation.

There is also another crucial point: if capitalism needs fewer and fewer industrial workers and creates more and more service workers (and not necessarily in domestic service), it does not follow that the aggregate effect of machines is to merely increase the suffering, exploitation and intensity of labour, for, as industrial labour is reduced, new middle class jobs available to the children of working class families given the opportunity to be educated in state schools are opened up. Even in the 19th century, a considerable amount of domestic service in wealthy upper class or middle class households was less dangerous and less difficult than exploitative factory work.

In any case, the long-run trend of capitalism has been a collapse in domestic service, given the advent of so many labour-saving machines and the creation of other professions, so Marx’s implied prediction that capitalism would merely see an explosion in domestic service “slavery” has been falsified. The idea that increasing domestic service employment is a major outcome of capitalist development also sits uncomfortably with the view that machines produce a large and endlessly growing reserve army of labour.

(7) Repulsion and Attraction of Workers through the Development of Machine Production, Crises in the Cotton Industry
Expansion of production by machinery can increase the number of workers employed in factories if their scale of production is expanded (Marx 1990: 577).

Capitalism also affects the world market:
“On the one hand, the immediate effect of machinery is to increase the supply of raw material in the same way, for example, as the cotton gin augmented the production of cotton. On the other hand, the cheapness of the articles produced by machinery, and the improved means of transport and communication furnish the weapons for conquering foreign markets. By ruining handicraft production in other countries, machinery forcibly converts them into fields for the supply of its raw material. In this way East India was compelled to produce cotton, wool, hemp, jute, and indigo for Great Britain. By constantly making a part of the hands ‘supernumerary,’ modern industry, in all countries where it has taken root, gives a spur to emigration and to the colonization of foreign lands, which are thereby converted into settlements for growing the raw material of the mother country; just as Australia, for example, was converted into a colony for growing wool. A new and international division of labour, a division suited to the requirements of the chief centres of modern industry springs up, and converts one part of the globe into a chiefly agricultural field of production, for supplying the other part which remains a chiefly industrial field.” (Marx 1906: 492–493).
However, as has been shown by Bairoch here and here, the West was largely self-sufficient in raw materials right up until the early 20th century and colonial exploitation of the Third World was by no means a necessary precondition or consequence of capitalism per se.

The idea that capitalism forces large-scale emigration is also plainly untrue, since the capitalist development in the United States, Canada, Australia and New Zealand happened despite massive immigration, not emigration. Nor was there large-scale emigration from Japan, South Korea or Taiwan during their industrial development.

Marx understands the rudiments of the business cycle:
“The enormous power, inherent in the factory system, of expanding by jumps, and the dependence of that system on the markets of the world, necessarily beget feverish production, followed by over-filling of the markets, whereupon contraction of the markets brings on crippling of production. The life of modern industry becomes a series of periods of moderate activity, prosperity, over-production, crisis and stagnation. The uncertainty and instability to which machinery subjects the employment, and consequently the conditions of existence, of the operatives become normal, owing to these periodic changes of the industrial cycle. Except in the periods of prosperity, there rages between the capitalists the most furious combat for the share of each in the markets. This share is directly proportional to the cheapness of the product. Besides the rivalry that this struggle begets in the application of improved machinery for replacing labour-power, and of new methods of production, there also comes a time in every industrial cycle, when a forcible reduction of wages beneath the value of labour-power, is attempted for the purpose of cheapening commodities.” (Marx 1906: 495–496).
So here, in Marx’s thinking, is another tendency in capitalism to reduce real wages: during depressions capitalists attempt to cut wages below subsistence level, and this must be another powerful force that keeps wages down to the value of the maintenance and reproduction of labour-power. Unfortunately, Marx was wrong here too. By the 1880s, nominal wage rigidity was becoming a stark reality of the advanced capitalist world even in recessions – and this was a powerful force that maintained real wages and allowed them to increase in expansions of the business cycle.

Marx also grossly overestimates the importance of foreign markets and exports in capitalist development, since not all capitalist economies need be export-led models.

(8) The Revolutionary Impact of Large-Scale Industry on Manufacture, Handicrafts and Domestic Industry
It is important to remember that even in the 19th century Marx saw an economy with multiple sectors: large-scale factory manufacturing, handicraft systems, domestic “sweat shop” labour systems, and old-style manufacture. But developed capitalism tended to make them compete and caused the destruction of old-style manufacture and handicraft labour, as the factory system triumphed.

(a) Overthrow of Co-operation based on Handcrafts and on the Division of Labour
Sometimes machines can expand handicraft industries which persist temporarily, but usually as a transition to the factor system (Marx 1990: 589).

(b) The Impact of the Factory System on Manufacture and Domestic Industries
The factory system can also outsource some of its production to domestic industries carried on at home:
“In contrast with the manufacturing period, the division of labour is thenceforth based, wherever possible, on the employment of women, of children of all ages, and of unskilled labourers, in one word, on cheap labour, as it is characteristically called in England. This is the case not only with all production on a large scale, whether employing machinery or not, but also with the so-called domestic industry, whether carried on in the houses of the workpeople or in small workshops. This modern so-called domestic industry has nothing, except the name, in common with the old-fashioned domestic industry, the existence of which presupposes independent urban handicrafts, independent peasant farming, and above all, a dwelling-house for the labourer and his family.” (Marx 1906: 504).
This “sweat shop” labour in homes can be even more exploitative than in the factories (Marx 1990: 591).

(c) Modern Manufacture
In this section, Marx gives various examples of exploitation in the factory system.

(d) Modern Domestic Industry
Marx covers here the exploitation in sweat shop domestic work in homes, such as lace-making and straw-plaiting.

(e) Transition from Modern Manufacture and Domestic Industry to Large-Scale Industry
Marx discusses the introduction of machinery into the British apparel industry:
“The decisively revolutionary machine, the machine which attacks in an equal degree the whole of the numberless branches of this sphere of production, dressmaking, tailoring, shoe-making, sewing, hat-making, and many others, is the sewing-machine.

Its immediate effect on the workpeople is like that of all machinery, which, since the rise of modern industry, has seized upon new branches of trade. Children of too tender an age are sent adrift. The wage of the machine hands rises compared with that of the house-workers, many of whom belong to the poorest of the poor. That of the better situated handicraftsmen, with whom the machine competes, sinks. The new machine hands are exclusively girls and young women. With the help of mechanical force, they destroy the monopoly that male labour had of the heavier work, and they drive off from the lighter work numbers of old women and very young children. The overpowering competition crushes the weakest of the manual labourers.” (Marx 1906: 516).
Paradoxically the Factory Act accelerated the use of machines:
“This industrial revolution which takes place spontaneously, is artificially helped on by the extension of the Factory Acts to all industries in which women, young persons and children are employed. The compulsory regulation of the working day as regards its length, pauses, beginning and end, the system of relays of children, the exclusion of all children under a certain age, &c, necessitates on the one hand more machinery and the substitution of steam as a motive power in the place of muscles. On the other hand, in order to make up for the loss of time, an expansion occurs of the means of production used in common, of the furnaces, buildings, &c.; in one word, greater concentration of the means of production and a correspondingly greater concourse of workpeople. The chief objection, repeatedly and passionately urged on behalf of each manufacture threatened with the Factory Act, is in fact this, that in order to continue the business on the old scale a greater outlay of capital will be necessary. But as regards labour in the so-called domestic industries and the intermediate forms between them and Manufacture, so soon as limits are put to the working day and to the employment of children, those industries go to the wall. Unlimited exploitation of cheap labour-power is the sole foundation of their power to compete.” (Marx 1906: 519–520).
Even though Marx paints this as an unmitigated evil, the actual increasing use of machinery reduces the number of workers being exploited (see Marx 1990: 606, n. 2).

(9) The Health and Education Clauses of the Factory Acts.
Marx examines here the consequences of the Factory Acts, including the Factory Acts Extension Act (15 August, 1867), and the Workshops Regulation Act (21 August, 1867). Marx admits a number of positive effects (Marx 1990: 611–615).

But large-scale industry breaks down stable employment:
“Modern Industry never looks upon and treats the existing form of a process as final. The technical basis of that industry is therefore revolutionary, while all earlier modes of production were essentially conservative. By means of machinery, chemical processes and other methods, it is continually causing changes not only in the technical basis of production, but also in the functions of the labourer, and in the social combinations of the labour-process. At the same time, it thereby also revolutionizes the division of labour within the society, and incessantly launches masses of capital and of workpeople from one branch of production to another. But if Modern Industry, by its very nature, therefore necessitates variation of labour, fluency of function, universal mobility of the labourer, on the other hand, in its capitalistic form, it reproduces the old division of labour with its ossified particularisations. We have seen how this absolute contradiction between the technical necessities of Modern Industry, and the social character inherent in its capitalistic form, dispels all fixity and security in the situation of the labourer; how it constantly threatens, by taking away the instruments of labour, to snatch from his hands his means of subsistence, and, by suppressing his detail-function, to make him superfluous. We have seen, too, how this antagonism vents its rage in the creation of that monstrosity, an industrial reserve army, kept in misery in order to be always at the disposal of capital; in the incessant human sacrifices from among the working class, in the most reckless squandering of labour-power, and in the devastation caused by a social anarchy which turns every economical progress into a social calamity.” (Marx 1906: 532–533).
Part of the evil is that parents too exploit their children (Marx 1990: 620).

But even here Marx admits the effectiveness of state intervention:
“The necessity for a generalization of the Factory Acts, for transforming them from an exceptional law relating to mechanical spinning and weaving—those first creations of machinery—into a law affecting social production as a whole, arose, as we have seen, from the mode in which Modern Industry was historically developed. In the rear of that industry, the traditional form of manufacture, of handicraft, and of domestic industry, is entirely revolutionised; manufactures are constantly passing into the factory system, and handicrafts into manufactures; and lastly, the spheres of handicraft and of the domestic industries become, in a, comparatively speaking, wonderfully short time, dens of misery in which capitalistic exploitation obtains free play for the wildest excesses. There are two circumstances that finally turn the scale: first, the constantly recurring experience that capital, so soon as it finds itself subject to legal control at one point, compensates itself all the more recklessly at other points; 1 secondly, the cry of the capitalists for equality in the conditions of competition, i.e., for equal restraint on, all exploitation of labour.” (Marx 1906: 536–537).
Marx now turns to the consequences of the Factory Acts Extension Act (15 August, 1867), and the Workshops Regulation Act (21 August, 1867), and argues that their enforcement was often lax (Marx 1990: 626).

Far from improving working conditions and making capitalism more humane and more stable, Marx came to the paradoxical conclusion that the legislation to regulate working conditions will only hasten the proletarian revolution:
“If the general extension of factory legislation to all trades for the purpose of protecting the working class both in mind and body has become inevitable, on the other hand, as we have already pointed out, that extension hastens on the general conversion of numerous isolated small industries into a few combined industries carried on upon a large scale; it therefore accelerates the concentration of capital and the exclusive predominance of the factory system. It destroys both the ancient and the transitional forms, behind which the dominion of capital is still in part concealed, and replaces them by the direct and open sway of capital; but thereby it also generalises the direct opposition to this sway. While in each individual workshop it enforces uniformity, regularity, order, and economy, it increases by the immense spur which the limitation and regulation of the working day give to technical improvement, the anarchy and the catastrophes of capitalist production as a whole, the intensity of labour, and the competition of machinery with the labourer. By the destruction of petty and domestic industries it destroys the last resort of the ‘redundant population,’ and with it the sole remaining safety-valve of the whole social mechanism. By maturing the material conditions, and the combination on a social scale of the processes of production, it matures the contradictions and antagonisms of the capitalist form of production, and thereby provides, along with the elements for the formation of a new society, the forces for exploding the old one.” (Marx 1906: 552).
But Marx’s proletarian revolution did not happen.

In the 4th German edition of Capital, an embarrassed Engels pointed out in an addendum that the British Factory and Workshop Act of 1878 was “by far the best [sc. law] on this subject” (Marx 1906: 552 n. 1).

(10) Large-Scale Industry and Agriculture
Use of machinery in the countryside for agricultural production eliminates human labour in a far more intense manner (Marx 1990: 637).

But once again Marx sees almost wholly negative effects:
“In the sphere of agriculture, modern industry has a more revolutionary effect than elsewhere, for this reason, that it annihilates the peasant, that bulwark of the old society, and replaces him by the wage labourer. Thus the desire for social changes, and the class antagonisms are brought to the same level in the country as in the towns. The irrational, old fashioned methods of agriculture are replaced by scientific ones. Capitalist production completely tears asunder the old bond of union which held together agriculture and manufacture in their infancy. … Capitalist production, by collecting the population in great centres, and causing an ever increasing preponderance of town population, on the one hand concentrates the historical motive-power of society; on the other hand, it disturbs the circulation of matter between man and the soil, i.e., prevents the return to the soil of its elements consumed by man in the form of food and clothing; it therefore violates the conditions necessary to lasting fertility of the soil. By this action it destroys at the same time the health of the town labourer and the intellectual life of the rural labourer. …. In modern agriculture, as in the urban industries, the increased productiveness and quantity of the labour set in motion are bought at the cost of laying waste and consuming by disease labour-power itself. Moreover, all progress in capitalistic agriculture is a progress in the art, not only of robbing the labourer, but of robbing the soil; all progress in increasing the fertility of the soil for a given time, is a progress towards ruining the lasting sources of that fertility. The more a country starts its development on the foundation of modern industry, like the United States, for example, the more rapid is this process of destruction. Capitalist production, therefore, develops technology, and the combining together of various processes into a social whole, only by sapping the original sources of all wealth—the soil and the labourer.” (Marx 1906: 554–556).
Totally missing is the observation that the tremendous productivity of capitalist production broke the Malthusian population trap and allowed the transfer of labour to other industries; the huge increase in agricultural output improved the living standards of workers and society at large. Another cutting observation is that, even though environmental degradation has been a feature of capitalist production, the Communist regimes of the 20th century also had a horrendous record on pollution and environmental degradation as well.

External Links
Harry Cleaver, Study Guide to Capital Volume I, Chapter 15.

Brewer, Anthony. 1984. A Guide to Marx’s Capital. Cambridge University Press, Cambridge.

Harvey, David. 2010. A Companion to Marx’s Capital. Verso, London and New York.

Marx, Karl. 1906. Capital. A Critique of Political Economy (vol. 1; rev. trans. by Ernest Untermann from 4th German edn.). The Modern Library, New York.

Marx, Karl. 1990. Capital. A Critique of Political Economy. Volume One (trans. Ben Fowkes). Penguin Books, London.

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