Today, I was wrestling with Bernie Sanders’ question, and that is why American people despite all the gains made in productivity, free trade and globalization have to work longer hours for fewer pay? Karl Marx gave the answer 150 years ago, which makes Marxian economics an important part of economic analysis. I am quoting the conclusion of the book “The Value of Marx: Political Economy for Contemporary Capitalism” by Alfredo Saad-Filho, pp107-110, also accessible online http://talmidim.cz/filosofie/Value%20of%20Marx.pdf
“This book analyses the relationship between labour, value, money and prices in Marx’s value theory. These categories are historically determined modes of existence of capitalist social relations, and they are analysed primarily from the aggregate, or at the level of class (rather than starting at the individual level, favoured by neoclassical economics). Four important conclusions have been drawn.
First, abstract labour, value and price are essential aspects of Marx’s analysis of labour and exploitation under capitalism. In spite of their importance, there is much controversy about their meaning, signiﬁcance and mutual relationship, both within and outside Marxian scholarship. This book has outlined a reading of Marx’s value theory that avoids the inconsistency charges often found in the literature, and it includes important pointers for further research.
Second, capitalist production necessarily involves social conﬂicts in production and distribution. These conﬂicts are unavoidable, because they spring from the relations of production that deﬁne this social system. Distributive conﬂicts resemble those in other class societies, for they involve disputes about how the cake (the national product) is shared among competing claims, while maintaining systemic stability. In contrast, conﬂicts in production derive from the class relations that distinguish capitalism from other modes of production. They are due to disputes about how much wage labour is performed and under what conditions, and their outcome plays a limiting role upon the distributive conﬂicts.
Third, intra-sectoral competition tends to disperse the individual proﬁt rates, because more proﬁtable capitals can invest larger sums for longer periods, select among a broader range of production techniques and hire the best workers, which reinforces their initial advantage. In contrast, intersectoral competition leads to the convergence of proﬁt rates, because capital migration redistributes the productive potential of society and increases supply in the more proﬁtable branches, thus reducing excess proﬁts. The ﬁnancial system plays an important role in both processes. Marx’s analysis of the contradictory dynamics of capital accumulation does not lead to static outcomes, either equalisation of proﬁt rates or the relentless concentration of capital. These are rarely smooth processes, and they often generate instability and trigger economic crises, that cause hardship and can destroy livelihoods. Crises and unemployment show that capitalism is not only the most productive, but also the most systematically destructive mode of production in history.
Fourth, and more generally, capitalist economies are unstable because of the conﬂicting forces of extraction, realisation, and accumulation of surplus value under competitive conditions. This instability is structural, and even the best economic policies cannot avoid it completely. Competition forces every capital to strive to increase labour productivity. This generally involves technical changes that increase the degree of mechanisation, the integration between labour processes within and across ﬁrms, and the potential scale of production. Therefore, competition socialises capitalist production: production loses its private character and becomes a social process . . .
For the means of production are employed as communal, social means of production and therefore not determined by the fact that they are the property of an individual, but by their relation to production, and the labour likewise is performed on a social scale.
The socialisation of production is not a smooth process. It is associated with large ﬁxed capital investment, the development of credit relations and speculation, deskilling, labour market shifts, structural unemployment, bankruptcy and crisis. These processes are often wasteful. They have led to workplace resistance and political confrontation and, historically, they have provided a powerful stimulus for social reforms and anti-capitalist revolt.
But this is not all. Capitalism changes constantly, and Marx argues that this mode of production tends to become increasingly unstable, because of its social and economic contradictions. This is essentially because competition destroys the capitalist basis of production: capital . . . increases the surplus labour time of the mass by all the means of art and science . . . It is thus, despite itself, instrumental in creating the means of social disposable time, in order to reduce labour time for the whole society to a diminishing minimum, and thus to free everyone’s time for their own development. But its tendency always, on the one side, to create disposable time, on the other, to convert it into surplus labour. If it succeeds too well at the ﬁrst, then it suffers from surplus production, and then necessary labour is interrupted, because no surplus labour can be realised by capital. The more this contradiction develops, the more does it become evident that the growth of the forces of production can no longer be bound up with the appropriation of alien labour but that the mass of workers must themselves appropriate their own surplus labour . . . Labour time as the measure of value posits wealth itself as founded on poverty, and disposable time as existing in and because of the antithesis to surplus labour time; or, the positing of an individual’s entire time as labour time, and his degradation therefore to mere worker, subsumption under labour. The most developed machinery thus forces the worker to work longer than the savage does, or than he himself did with the simplest, crudest tools.
This extensive citation highlights two important contradictions at the heart of capitalist accumulation. First, as was shown above, competition implies the tendency towards increasing labour productivity and rising technical and organic compositions of capital. If more output can be produced with the same labour input, living standards can increase in spite of the reduction of labour time. For example, the working week of important categories of workers has declined substantially in the wealthiest countries in the world, since the mid-nineteenth century. In spite of this, living standards have improved sharply. However, reductions in the working week generally fail to keep pace with technical progress, because the capitalists tend to resist against measures that reduce the rate of exploitation. Experience shows that the success of attempts to curtail labour time depends upon the strength and political leverage of the working class, whilst the state of technology is an important, but secondary inﬂuence. Yet, the reduction of the working week is important not only for the workers. If technology improves but labour time fails to decline, the economy becomes increasingly prone to overproduction crises. The contradiction between the interest of individual capitalists in extending the working week in order to extract absolute surplus value, and their collective interest in reducing it when necessary in order to help preserve economic (and political) stability with high levels of employment, makes it unlikely that maximum rates of exploitation and rapid growth can ever be compatible for long periods.
Second, and more importantly in the long term, rising labour productivity reduces the signiﬁcance of living labour for the production of use values and, consequently, for the determination of value. Under capitalism, technical progress is unlikely to eliminate drudgery and long hours of work entirely. Their perpetuation is due to social, rather than technical, barriers. More speciﬁcally, technical progress facilitates the satisfaction of needs through non-market processes and it permits the reduction of labour time and the automation of repetitive, dangerous and unhealthy tasks. However, this is anathema for capitalism, because it conﬂicts with the valorisation of capital and the reproduction of the relations of exploitation. At some stage, Marx believes that the majority will no longer be prepared to accept these limits on the achievement of their individual and collective potential.
For Marx, the abolition of capitalism will mark the end of the prehistory of human society. However, the transition towards another mode of production, communism, is neither inexorable nor unavoidable. The social relations at the core of capitalism will change only if overwhelming pressure is applied by the majority. Failing that, capitalism may persist indeﬁnitely, in spite of its human and environmental costs.
In the meantime, informed mass intervention is necessary in order to resolve important problems of our age, among them environmental degradation, long-term unemployment, poverty amidst plenty in rich and poor countries alike, the dissemination of curable or controllable diseases, illiteracy, cultural, ethnic and economic oppression, and other difﬁculties. In addressing these problems and their potential solutions, Karl Marx offers an analysis that is unencumbered by current prejudices, and that can inspire creative solutions.”