#dialeticalmaterialism — Public Fediverse posts

https://jacobin.com/2026/07/marx-neoclassical-economics-ai-labor

Could a #Marxist with better theoretical chops than me walk through this Jacobin article about AI, Marx's labour theory of value, and the tendency for the rate of profit to fall? Because I don't understand it. Admittedly, I have yet to dive into the tome that is Capital Vol I. But the argument put forth seems to rest on odd assumptions.

In a nutshell, I think the assumption that (v), and thus (s), are small for AI is false.

=============================

>At first, the implications for Karl Marx’s labor theory of value seem bad or in contradiction with the facts or our expectations. AI implies the introduction of extremely capital-intensive techniques of production or, to use Marxist terminology, of processes with a very high organic composition of capital. In other words, AI implies a very high c/v ratio. That is the ratio of constant capital (c) to capital engaged to hire labor (v). If the presence of labor is small and, perhaps in cases of fully automated production, close to zero, the surplus value produced by labor must also be small or close to zero. Regardless of how high the rate of exploitation is, a very small v implies a very small s (surplus value).
>
>We thus establish that the rate of profit [s/(c+v)] must also be very small

Why are we assuming that (v) is low here? AI fundamentally doesn't work without a vast corpus of data produced by labourers. Indeed the whole assumption made later, that folks expect rates of profit to be high for AI:

>So will AI bring capitalism to an end? This does not seem to square well with the facts and expectations of not smaller, but higher, rates of profits that would come from the introduction of AI.

rests entirely on capital being permitted to use that data free-of-charge. AI isn't profitable if labour is actually paid for the data it creates.

>But now, allow that total automatization of production in this sector creates a demand for production of goods and services such that only live human labor can do, or where live human labor is superior to AI: think of caring activities, sports, nursing, top cooking skills, coach training, bartending, creative writing, and a multitude of other tasks...

Why are we allowing that? It is not at all a given that automatization of some human activities will necessarily create demand for those activities that cannot be automated. Those activities already have demand, and no argument is made for how their demand will suddenly increase. Presumably, the author is intending to say that *new* sectors previously nonexistent will come into being? If so, what kinds?

Ultimately, I think this is conflating mechanization and automation. Mechanization optimizes labour. Automation gets rid of it entirely. They're fundamentally different phenomena. Mechanization permits reallocation of labour. Automation fundamentally cannot. (An aside: the transformation of mechanization, of quantitatively lowering per-unit labour needs, into automation, of having that lowering hit zero, certainly rings "transformation of quantity into quality" #DialeticalMaterialism bells in my head).

And if we really do think we're approaching an automation utopia --- I don't think that we are --- then surely that *would* be the material basis for a transformation from capitalism to socialism (or even communism), as production and allocation of wealth have been entirely automated!

=============================

Also:

>But as we know, in capitalism, commodities and services are not sold at labor values but at the prices of production that equalize profit rates in capital- and labor-intensive sectors (i.e., in sectors with different organic compositions of capital). This in turn means that the amount of profit in the automated sector will, in equilibrium, be proportional to the (huge) amount of capital employed in the automated sector. Therefore, our automated sector’s profit will not be negligible as it seemed at first when we looked at it in isolation and assumed that the entire economy is composed of it only. On the contrary, the profit rate may go up because replacement of labor in one sector is accompanied by the creation of more labor-intensive processes of production elsewhere.

Uh... what? That second sentence is not at all justified by the first, is it? The first sentence speaks of *rates* of profit, and how those rates of profit for different sectors of the economy all tend toward an equilibrium value over time, presumably as capital continually re-allocates itself to seek higher rates of profit. The second sentence speaks of profit *itself* and, further, asserts that a particular sector's profit is proportional to its own capital investments (c), something that is not stated by the first sentence. Ultimately, if (v) is truly close to zero for the capital-intensive AI sector, then the rate of profit must necessarily be close to zero, and the shifts of the rates of profit for the capital-intensive AI sector and labour-intensive sector towards an equilibrium point can only go one way: away from the capital-intensive AI sector and towards the labour-intensive sector. In this model --- assuming (v) (and thus [s]) for AI is indeed low --- AI craters in spectacular fashion, does it not?

I'm so confused :(

#socialism #communism #marxism

https://jacobin.com/2026/07/marx-neoclassical-economics-ai-labor

Could a #Marxist with better theoretical chops than me walk through this Jacobin article about AI, Marx's labour theory of value, and the tendency for the rate of profit to fall? Because I don't understand it. Admittedly, I have yet to dive into the tome that is Capital Vol I. But the argument put forth seems to rest on odd assumptions.

In a nutshell, I think the assumption that (v), and thus (s), are small for AI is false.

=============================

>At first, the implications for Karl Marx’s labor theory of value seem bad or in contradiction with the facts or our expectations. AI implies the introduction of extremely capital-intensive techniques of production or, to use Marxist terminology, of processes with a very high organic composition of capital. In other words, AI implies a very high c/v ratio. That is the ratio of constant capital (c) to capital engaged to hire labor (v). If the presence of labor is small and, perhaps in cases of fully automated production, close to zero, the surplus value produced by labor must also be small or close to zero. Regardless of how high the rate of exploitation is, a very small v implies a very small s (surplus value).
>
>We thus establish that the rate of profit [s/(c+v)] must also be very small

Why are we assuming that (v) is low here? AI fundamentally doesn't work without a vast corpus of data produced by labourers. Indeed the whole assumption made later, that folks expect rates of profit to be high for AI:

>So will AI bring capitalism to an end? This does not seem to square well with the facts and expectations of not smaller, but higher, rates of profits that would come from the introduction of AI.

rests entirely on capital being permitted to use that data free-of-charge. AI isn't profitable if labour is actually paid for the data it creates.

>But now, allow that total automatization of production in this sector creates a demand for production of goods and services such that only live human labor can do, or where live human labor is superior to AI: think of caring activities, sports, nursing, top cooking skills, coach training, bartending, creative writing, and a multitude of other tasks...

Why are we allowing that? It is not at all a given that automatization of some human activities will necessarily create demand for those activities that cannot be automated. Those activities already have demand, and no argument is made for how their demand will suddenly increase. Presumably, the author is intending to say that *new* sectors previously nonexistent will come into being? If so, what kinds?

Ultimately, I think this is conflating mechanization and automation. Mechanization optimizes labour. Automation gets rid of it entirely. They're fundamentally different phenomena. Mechanization permits reallocation of labour. Automation fundamentally cannot. (An aside: the transformation of mechanization, of quantitatively lowering per-unit labour needs, into automation, of having that lowering hit zero, certainly rings "transformation of quantity into quality" #DialeticalMaterialism bells in my head).

And if we really do think we're approaching an automation utopia --- I don't think that we are --- then surely that *would* be the material basis for a transformation from capitalism to socialism (or even communism), as production and allocation of wealth have been entirely automated!

=============================

Also:

>But as we know, in capitalism, commodities and services are not sold at labor values but at the prices of production that equalize profit rates in capital- and labor-intensive sectors (i.e., in sectors with different organic compositions of capital). This in turn means that the amount of profit in the automated sector will, in equilibrium, be proportional to the (huge) amount of capital employed in the automated sector. Therefore, our automated sector’s profit will not be negligible as it seemed at first when we looked at it in isolation and assumed that the entire economy is composed of it only. On the contrary, the profit rate may go up because replacement of labor in one sector is accompanied by the creation of more labor-intensive processes of production elsewhere.

Uh... what? That second sentence is not at all justified by the first, is it? The first sentence speaks of *rates* of profit, and how those rates of profit for different sectors of the economy all tend toward an equilibrium value over time, presumably as capital continually re-allocates itself to seek higher rates of profit. The second sentence speaks of profit *itself* and, further, asserts that a particular sector's profit is proportional to its own capital investments (c), something that is not stated by the first sentence. Ultimately, if (v) is truly close to zero for the capital-intensive AI sector, then the rate of profit must necessarily be close to zero, and the shifts of the rates of profit for the capital-intensive AI sector and labour-intensive sector towards an equilibrium point can only go one way: away from the capital-intensive AI sector and towards the labour-intensive sector. In this model --- assuming (v) (and thus [s]) for AI is indeed low --- AI craters in spectacular fashion, does it not?

I'm so confused :(

#socialism #communism #marxism