The Socialism Thread

[cwmbrancity]

well said

[caze]

Marx's analysis of how the capitalist mode of production works is pretty accurate

 

It's really not. Like I've said already, his theory of value is wrong (so his analysis of the industrial mode of production is wrong), but even if he'd gotten that right as an analysis of the industrial revolution in England, the modern world doesn't work like that at all. The whole conception is based on a political and technological edifice that ceased to exist shortly after he came up with it, it's no surprise it failed to account for anything that came afterwards. Deeper than that though, his ideas on modes of production are logically dependent on his idea of historical materialism, which is also false, and can be traced back to the similarly silly ideas of Hegel and Plato.

 

And this shit isn't off topic, ffs, it makes up a vast swathe of socialist thought. Sure there's more to socialism than Marx, feel free to bring some of that other shit up and we'll discuss it as well.

[LimpyLoo]

 

Marx's analysis of how the capitalist mode of production works is pretty accurate

 

It's really not. Like I've said already, his theory of value is wrong (so his analysis of the industrial mode of production is wrong), but even if he'd gotten that right as an analysis of the industrial revolution in England, the modern world doesn't work like that at all. The whole conception is based on a political and technological edifice that ceased to exist shortly after he came up with it, it's no surprise it failed to account for anything that came afterwards. Deeper than that though, his ideas on modes of production are logically dependent on his idea of historical materialism, which is also false, and can be traced back to the similarly silly ideas of Hegel and Plato.

 

And this shit isn't off topic, ffs, it makes up a vast swathe of socialist thought. Sure there's more to socialism than Marx, feel free to bring some of that other shit up and we'll discuss it as well.

 

 

You were the dude who criticised him for "not predicting future technologies?"

 

The phrase "new skin for the old ceremony" comes to mind: while the landscape of capitalism may be different, the underlying mechanisms haven't changed.

 

I think if you wanna convince us that the underlying mechanisms have changed, you're gonna have to offer some concrete examples.

[caze]

You were the dude who criticised him for "not predicting future technologies?"

 

I didn't criticise him for failing to predict future technologies, just pointed out that the fact of those future technologies invalidated his assumptions. I already said that to you before, and that's what the bit you bolded is re-stating.

 

 

The phrase "new skin for the old ceremony" comes to mind:

 

Is that an actual phrase or just an album title? (one of his best)

 

while the landscape of capitalism may be different, the underlying mechanisms haven't changed.

 

I think if you wanna convince us that the underlying mechanisms have changed, you're gonna have to offer some concrete examples.

 

nearly every aspect of the underlying mechanisms have changed, multiple times. from the mechanics of investment, innovation, company structure/growth/death/evolution, the use of labour/education/human resource utilisation, the legal contexts everything has operated in, to the financial instruments used in conjunction with all of that. if you think there's some kind of universal truth of capitalism underlying all of that, then it's you that has to provide the evidence, because you won't find it in Marx.

[chenGOD]

 

Marx's analysis of how the capitalist mode of production works is pretty accurate

 

It's really not. Like I've said already, his theory of value is wrong (so his analysis of the industrial mode of production is wrong), but even if he'd gotten that right as an analysis of the industrial revolution in England, the modern world doesn't work like that at all. The whole conception is based on a political and technological edifice that ceased to exist shortly after he came up with it, it's no surprise it failed to account for anything that came afterwards. Deeper than that though, his ideas on modes of production are logically dependent on his idea of historical materialism, which is also false, and can be traced back to the similarly silly ideas of Hegel and Plato.

 

And this shit isn't off topic, ffs, it makes up a vast swathe of socialist thought. Sure there's more to socialism than Marx, feel free to bring some of that other shit up and we'll discuss it as well.

 

 

 

You'll have to do better than saying "it's really not", considering the many many economists who think Marx had some valid criticism and analysis of capitalism.

 

I'm just curious, how do you think Marx characterizes capitalism?

[goDel]

 

nearly every aspect of the underlying mechanisms have changed, multiple times. from the mechanics of investment, innovation, company structure/growth/death/evolution, the use of labour/education/human resource utilisation, the legal contexts everything has operated in, to the financial instruments used in conjunction with all of that. if you think there's some kind of universal truth of capitalism underlying all of that, then it's you that has to provide the evidence, because you won't find it in Marx.

Have you read that book by Piketty? Surely that should be some proof that despite of all those advances you sum up, the underlying principles of how the economy works haven't really changed. If at all.

 

Also, I'm interested to hear your thoughts on what the changes in the mechanics of innovation and investment have been. And what impact those changes should have on the way an economy functions. Please cure me from my ignorance, because I don't see it.

[LimpyLoo]

Yeah I mean borrowing against the future, betting on (or against) a company, exploiting asymmetric information, etc etc...

All these sorts of things are just fancy ways of leveraging power to make money.

They're all just highly abstract ways of buying a banana for one dollar and selling it for two.

All of it can be neatly mapped onto the basic Marxist model of capitalism.

[LimpyLoo]

What is the difference between owning a lemonade stand

(And renting labor to produce lemonade)

And investing in a lemonade stand?

 

The latter is just a highly abstract variant of the former

 

You are just leveraging your resources (money, lemonade stand)

To acquire more resources

 

In the latter

You are leveraging your existing resources and market uncertainty

(If everyone could see the future, these speculative market games would cease to exist)

And as long as your bankroll can withstand the variance (I.e. All the times the lemonade stand goes bust)

Then it's just a simple Bayesian calculation

(E.g. 90% of the time I get a 0% return

And 10% I get a 10,000% return...or whatever)

 

These are not new mechanisms

They're just fancy new ways of navigating the same old capitalist model

It's the same as buying lemons for one dollar

And selling lemonade for two

[caze]

Have you read that book by Piketty? Surely that should be some proof that despite of all those advances you sum up, the underlying principles of how the economy works haven't really changed. If at all.

 

I've not read it, but read a lot about it, it's on my wish-list. Seems there's some good about it, he shares my disdain for the non-empirical nature of much economics apparently. Ironically though he reaches non-empirical conclusions, that growth in wealth inequality must widen (that only holds true in his model if you make lots of assumptions about growth rates and other things). There were lots of flaws in his data as well apparently.

 

Also, I'm interested to hear your thoughts on what the changes in the mechanics of innovation and investment have been. And what impact those changes should have on the way an economy functions. Please cure me from my ignorance, because I don't see it.

 

In terms of innovation there was no way he could have predicted the speed at which innovation now moves, and the knock on effect that would have on labour markets (closing/minimising/specialising some, creating lots of brand new ones in their place, generally of higher value), his ideas were pretty strongly fixed around the notion of large monolithic blocks of labour being exploited by the capital controlling class, rather than ridiculously variegated situation that currently exists (he had ideas around division of labour, but that doesn't encompass the complexity of modern labour segmentation). These ideas are one of the main reasons that Marx's predictions on wage depression never came to pass.

 

The relationship of this to finance is the cost of innovation, which in Marx's time was incredibly high, but today is virtually zero - this is what has allowed the vast growth in the number of companies (in both the service and manufacturing sectors) which helped the growth of the segmentation, the high cost of innovation in Marx's time lead to capital investment being focused on innovation rather than wages, he assumed this would continue hence his predicted downward wage trend. When the cost of innovation began to rapidly decrease though, capital could be put to all kinds of different uses, from paying people better to creating whole new classes of (generally better paying) jobs - which led to the explosion of the middle class from the 50s on.

 

There are other areas in finance that Marx was in no position to predict either, many of which where at fault for the recent global financial meltdown. There's no valid Marxist analysis of that financial collapse.

 

I'm not trying to argue here that the modern system is great or anything, for one thing it's super dependant on growth, and risk has been managed terribly in the financial sphere (largely due to non-empirical economic models that were telling everyone everything was going to be fine), but Marx is more of historical curio at this point. He doesn't have much to say about the modern economy, he never discovered any universal laws of human society, economics or even the operation of capital. Capitalism has gone through multiple re-inventions of itself since the earliest forms of merchant capitalism in the middle ages, there's been two (or maybe even three) since Marx's time already, Marx could barely predict how it was behaving in his own time it's no surprise he has failed to keep up since.

[chenGOD]

 

Have you read that book by Piketty? Surely that should be some proof that despite of all those advances you sum up, the underlying principles of how the economy works haven't really changed. If at all.

 

I've not read it, but read a lot about it, it's on my wish-list. Seems there's some good about it, he shares my disdain for the non-empirical nature of much economics apparently. Ironically though he reaches non-empirical conclusions, that growth in wealth inequality must widen (that only holds true in his model if you make lots of assumptions about growth rates and other things). There were lots of flaws in his data as well apparently.

 

Also, I'm interested to hear your thoughts on what the changes in the mechanics of innovation and investment have been. And what impact those changes should have on the way an economy functions. Please cure me from my ignorance, because I don't see it.

 

In terms of innovation there was no way he could have predicted the speed at which innovation now moves, and the knock on effect that would have on labour markets (closing/minimising/specialising some, creating lots of brand new ones in their place, generally of higher value), his ideas were pretty strongly fixed around the notion of large monolithic blocks of labour being exploited by the capital controlling class, rather than ridiculously variegated situation that currently exists (he had ideas around division of labour, but that doesn't encompass the complexity of modern labour segmentation). These ideas are one of the main reasons that Marx's predictions on wage depression never came to pass.

 

The relationship of this to finance is the cost of innovation, which in Marx's time was incredibly high, but today is virtually zero - this is what has allowed the vast growth in the number of companies (in both the service and manufacturing sectors) which helped the growth of the segmentation, the high cost of innovation in Marx's time lead to capital investment being focused on innovation rather than wages, he assumed this would continue hence his predicted downward wage trend. When the cost of innovation began to rapidly decrease though, capital could be put to all kinds of different uses, from paying people better to creating whole new classes of (generally better paying) jobs - which led to the explosion of the middle class from the 50s on.

 

There are other areas in finance that Marx was in no position to predict either, many of which where at fault for the recent global financial meltdown. There's no valid Marxist analysis of that financial collapse.

 

I'm not trying to argue here that the modern system is great or anything, for one thing it's super dependant on growth, and risk has been managed terribly in the financial sphere (largely due to non-empirical economic models that were telling everyone everything was going to be fine), but Marx is more of historical curio at this point. He doesn't have much to say about the modern economy, he never discovered any universal laws of human society, economics or even the operation of capital. Capitalism has gone through multiple re-inventions of itself since the earliest forms of merchant capitalism in the middle ages, there's been two (or maybe even three) since Marx's time already, Marx could barely predict how it was behaving in his own time it's no surprise he has failed to keep up since.

 

 

I've highlighted two bits from you.

 

The majority of workers (64%) in America work at firms with 100 or more employees (source). There are 122 firms in America with 100 or more employees (source). I'd say that pretty emphatically represents the majority of labour being controlled by the capital class.

 

Adjusted for inflation, median wages peaked in the 1970s (source). Or put another way - the middle class in America is poorer than at any time since the 1940s (source).

 

In an inverse to your last paragraph - I'm not saying that Marxism is the way forward - what I am saying is that Marx (not necessarily Marxists, but Marx himself - in Capital) provided, and continues to provide a good critique/analysis of capitalism.

[LimpyLoo]

Go Chen

 

(I'm gonna butt out because you two are much better-informed than I am on this stuff)

[caze]

The majority of workers (64%) in America work at firms with 100 or more employees (source). There are 122 firms in America with 100 or more employees (source). I'd say that pretty emphatically represents the majority of labour being controlled by the capital class.

 

No it doesn't, for one 64% isn't particularly emphatic, it might represent a majority, but I never mentioned a simple majority being a consideration anyway. Even for those employees I don't think modern working conditions bear any similarities to what Marx was predicting. The US isn't the whole capitalist world either.

 

 

 

Adjusted for inflation, median wages peaked in the 1970s (source). Or put another way - the middle class in America is poorer than at any time since the 1940s (source).

 

In an inverse to your last paragraph - I'm not saying that Marxism is the way forward - what I am saying is that Marx (not necessarily Marxists, but Marx himself - in Capital) provided, and continues to provide a good critique/analysis of capitalism.

 

That doesn't disprove my point though, look at what the graph does after it bottoms out, it goes back up again. And again, this is just the US, other countries show different peaks and troughs at different times. Pretty much none of which, including the US, is what Marx predicted. I also note the first link says 'by one measure', indicating there is some other measure that doesn't show these trends, there are different methods for tracking inflation, presumably other methods would give different graphs? The figures look a bit suspicious from around the 90s in particular.

[eugene]

Adjusted for inflation, median wages peaked in the 1970s (source). Or put another way - the middle class in America is poorer than at any time since the 1940s (source).

well that's obviously not true, because even if inflation-adjusted wages are lower, what you can buy with a set amount of money improved drastically due to technological advances. just think of the computer you could buy with 1000$ in the 70's and today, and it's obvious that it's true to many other products. relative, income based poverty and inequality measures have their place and importance, but in this thread the focus is obviously on objective measures of human existence within capitalism.

[caze]

well that's obviously not true, because even if inflation-adjusted wages are lower, what you can buy with a set amount of money improved drastically due to technological advances. just think of the computer you could buy with 1000$ in the 70's and today, and it's obvious that it's true to many other products. relative, income based poverty and inequality measures have their place and importance, but in this thread the focus is obviously on objective measures of human existence within capitalism.

 

Inflation is supposed to account for some of those differences, it's more of an art than a science though, and as I said there are different ways of calculating it. You're right though, numerical differences in dollar amounts and equality ratios have their place, but they're not the same thing as actual real life standard of living.

Edited October 1, 2015 by caze

[eugene]

the 1k$ i had in mind are real, inflation adjusted ones.

[goDel]

Rather odd how someone can have a disdain for the non-empirical nature of much of economics, but has his own ideas based roughly on opinion, cherry picked numbers and what I assume is hearsay. Piketty's data "apparently" has lots of flaws. Well, apparently your disdain for non-empirical conclusion only holds for others and not for yourself? What do you mean apparently? I'm sure you'd agree that such a claim needs to have some empirical basis?

 

Sorry if I come at you as a huge dick, but at this moment I'm not even sure with who I'm dealing with here. A college student with too much time to surf the internet, and who sells himself as being smart and thinks the rest of the world is dumb?

 

As for your other comments:

How empirical is "ridiculously variegated situation that currently exists" actually? There are lots of examples where markets are being dominated by a small set of global players. Look at finance and accounting, the pharmaceutical industry, oil and energy, consumer goods. And as far as I can tell, in most of these markets the trend is that companies tend to buy eachother and create even bigger ones. (banks, pharma should be obvious markets where takeovers are rather rule instead of exception) So, I'm really wondering where this ridiculously variegated situation comes from. And to what extent it's actually at an historical high (compared to Marx's age)? So high that Marx's notion of large monolithic blocks of labor (or rather capital? let's make it about capital, so we can use piketty's work) 'apparently' no longer holds. What makes you say that? You must have some empirical proof in your pocket. And with empirical proof, I hope you mean something different than your personal experience??

 

And what makes you say that the cost of innovation has rapidly decreased? Or even close to zero? What? Innovation is free? I hope you're not thinking about chips/memory getting cheaper. (existing) Products getting cheaper does not imply R&D (= innovation?) getting cheaper. And typically margins on technology (iphones?) and let's say pharma are still huge. Huge because of "innovation" (R&D), for instance. I'm guessing you're confusing cheap products (because of some innovative technology) with the actual costs of developing that innovative technology (which is innovation, imo).

 

Sure, it is getting cheaper to have your genome sequenced, and research in this area can go faster (and possibly cheaper? still no zero!), but I'm seeing no empirical proof that the relative cost of "innovation" is radically lower wrt in the days Marx wrote his book. For all I know, it might be even astronomically higher. Relatively speaking. I don't know. But even if it is different, I still don't see how the basic principles of the economy have changed.

[chenGOD]

 

The majority of workers (64%) in America work at firms with 100 or more employees (source). There are 122 firms in America with 100 or more employees (source). I'd say that pretty emphatically represents the majority of labour being controlled by the capital class.

 

No it doesn't, for one 64% isn't particularly emphatic, it might represent a majority, but I never mentioned a simple majority being a consideration anyway. Even for those employees I don't think modern working conditions bear any similarities to what Marx was predicting. The US isn't the whole capitalist world either.

 

 

 

Adjusted for inflation, median wages peaked in the 1970s (source). Or put another way - the middle class in America is poorer than at any time since the 1940s (source).

 

In an inverse to your last paragraph - I'm not saying that Marxism is the way forward - what I am saying is that Marx (not necessarily Marxists, but Marx himself - in Capital) provided, and continues to provide a good critique/analysis of capitalism.

 

That doesn't disprove my point though, look at what the graph does after it bottoms out, it goes back up again. And again, this is just the US, other countries show different peaks and troughs at different times. Pretty much none of which, including the US, is what Marx predicted. I also note the first link says 'by one measure', indicating there is some other measure that doesn't show these trends, there are different methods for tracking inflation, presumably other methods would give different graphs? The figures look a bit suspicious from around the 90s in particular.

 

You said: "his ideas were pretty strongly fixed around the notion of large monolithic blocks of labour being exploited by the capital controlling class"

If 64% is not a large monolithic block, then I don't know what is.

Let's put it another way - those firms (of 100 employees or more) represent 2.44% of all firms in America. So 64% of the working force is employed by 2.44% of employees.

 

 

The "one measure" is the adjusted by inflation measure. Which is appropriate, because it reflects the world we live in now. There are two main measures of inflation (CPI and PPI) and by either of those measures, you'll find very similar results. Why the lower median wages are important is because while yes, as eugene says, you can buy a better computer for $1000 now than you could in the 1970s, the ability of people to spend that $1000 had decreased, because, obviously, they have lower incomes. And also really? "the figures look a bit suspicious from around the 90s"? Provide something besides conjecture.

 

As to innovation - some argue that it is increasingly more expensive to innovate. Consider this: Apple spent $1.9 billion in Q4 2014 and Q1 2015, and yet there were 5 tech companies that spent more on R&D in 2014 than Apple. Or consider the wild rounds of funding that many start-ups have to go through in order to "innovate". Perhaps incremental improvements have become cheaper, but I would argue that true innovation (Tesla is burning through cash to create an electric car and the required ecosystem to make it viable, as another example) is, if anything, more expensive than ever.

 

Capitalism in the 21st century is essentially still based on Ricardian economics - and much of Marx's critique of capitalism was based on his understanding of Ricardian economics. And if you're going to read Piketty, prepare to be disappointed, because he also believes that Marx's analysis was important and still bears relevance today. There are obviously limitations to Marx, (paucity of data being primary among those), but to dismiss him out of hand is foolhardy.

[eugene]

 

Why the lower median wages are important is because while yes, as eugene says, you can buy a better computer for $1000 now than you could in the 1970s, the ability of people to spend that $1000 had decreased, because, obviously, they have lower incomes.

the income difference is much smaller than technological efficiency/advance though. 345$ peak per week in the 70's vs 305$ in 2015. that 305 of todays gets you a lot more than the 345$ in the 70's.

 

the declining weekly works hours graph is pretty important as well, if you'd control for weekly works hours you'd have much less of a difference. those 3 hours difference are about 25 dollars a week,

[chenGOD]

Hours worked are a function of the control of labour to maximise profit for the capitalist controlling the labour. That's out of the control of the wage worker. So I'm not sure why you'd control for that.

 

If the income difference is much greater, then why is poverty on the rise in the US? Just having a TV or fridge doesn't mean you aren't poor. Sure, it's better to be poor in the US than poor in Burma, but you're still poor. You're still not taking a vacation once a year and you're still living paycheque to paycheque. This is what the lower median wage means in real terms. Sure you might argue that those aren't rights, but the argument is that progress is supposed to mean workers have to worry less about living and providing for family. Which is clearly not the case.

 

(btw caze, I use the US because they all about dat capitalism).

[eugene]

Hours worked are a function of the control of labour to maximise profit for the capitalist controlling the labour. That's out of the control of the wage worker. So I'm not sure why you'd control for that.

ok, that makes sense i guess. there are direct hourly wage statistics anyway.

though free time has a lot of value as well. so i can ask if employer is forcing/allowing the worker to work a little less (3 weekly hours), does it affect worker's quality of life in general?

 

If the income difference is much greater, then why is poverty on the rise in the US?

 

doesn't look like it, seems to be bouncing between 12-15% for the last 40 years:

 

Just having a TV or fridge doesn't mean you aren't poor. Sure, it's better to be poor in the US than poor in Burma, but you're still poor. You're still not taking a vacation once a year and you're still living paycheque to paycheque. This is what the lower median wage means in real terms. Sure you might argue that those aren't rights, but the argument is that progress is supposed to mean workers have to worry less about living and providing for family. Which is clearly not the case.

 

 

providing what? could a worker in the 70's provide computers, internets, better education, richer leisure options and many other things that become a lot cheaper?

if you want to make an argument about relative standards of life or inequality then do it directly, but it's pretty clear that objectively people are able to afford much more cooler things than they could decades ago.

[caze]

Rather odd how someone can have a disdain for the non-empirical nature of much of economics, but has his own ideas based roughly on opinion, cherry picked numbers and what I assume is hearsay. Piketty's data "apparently" has lots of flaws. Well, apparently your disdain for non-empirical conclusion only holds for others and not for yourself? What do you mean apparently? I'm sure you'd agree that such a claim needs to have some empirical basis?

 

What a strange reply. I'm just some guy on the internet, what empirical basis do I need for my opinions other than the empirical work of other people who actually research these things? Should I just accept Piketty knows what he talking about because it's in fashion with the left currently, ignoring all the other people with well reasoned arguments who disagree with him? That's just some bullshit argument from authority. If you've read Piketty then surely you're familiar with the criticisms of the data that came out shortly after the book? I followed the back and forth after that and wasn't left particularly satisfied with his responses.

 

 

Sorry if I come at you as a huge dick, but at this moment I'm not even sure with who I'm dealing with here. A college student with too much time to surf the internet, and who sells himself as being smart and thinks the rest of the world is dumb?

 

I'm a 35 year old software engineer who never went to college (been working as a programmer since I was 15). Who are you (aside from a huge dick that is )?

 

As for your other comments:

How empirical is "ridiculously variegated situation that currently exists" actually? There are lots of examples where markets are being dominated by a small set of global players. Look at finance and accounting, the pharmaceutical industry, oil and energy, consumer goods. And as far as I can tell, in most of these markets the trend is that companies tend to buy eachother and create even bigger ones. (banks, pharma should be obvious markets where takeovers are rather rule instead of exception) So, I'm really wondering where this ridiculously variegated situation comes from.

 

You've not understood what I was talking about (apologies if I wasn't being clear), I'm talking about diversity in the labour market (which includes different jobs within companies, not just between competing companies), not among corporations (although there's vastly more competing companies around now than there were in Marx's time), and how this diversity helps explain why Marx's predictions on wage deflation never came to pass.

 

And what makes you say that the cost of innovation has rapidly decreased? Or even close to zero? What? Innovation is free? I hope you're not thinking about chips/memory getting cheaper. (existing) Products getting cheaper does not imply R&D (= innovation?) getting cheaper. And typically margins on technology (iphones?) and let's say pharma are still huge. Huge because of "innovation" (R&D), for instance. I'm guessing you're confusing cheap products (because of some innovative technology) with the actual costs of developing that innovative technology (which is innovation, imo).

 

Sure, it is getting cheaper to have your genome sequenced, and research in this area can go faster (and possibly cheaper? still no zero!), but I'm seeing no empirical proof that the relative cost of "innovation" is radically lower wrt in the days Marx wrote his book. For all I know, it might be even astronomically higher. Relatively speaking. I don't know. But even if it is different, I still don't see how the basic principles of the economy have changed.

 

I'm not talking about the modern day (though I can see why that may not have been clear), the first innovations that allowed for a rise in wages came from innovations in industrial management. Factories tended to be run in a very ad hoc manner at the start of the industrial revolution, but various advances in efficiency (taylorism, fordism, rationalization, etc) led to a far greater productivity and increased profits. This had started in Marx's time but there wasn't much in the way of wage increases and there was a lot of worker dissatisfaction to begin with, this no doubt influenced Marx's negative view of innovation and the likelihood of wage depression in his eyes (for good reason). Wage increases eventually started though once the initial capital investments in the new methods were paid off, before the turn of the century, and then in the pre-war years you started to see wage increases in excess of productivity increases. The increased profits could then be funnelled into more innovations and other investments, and new jobs (often to replace old jobs made obsolete by automation), new services, new commodities. This whole thing then exploded in the post-war era, and wage growth saw it's second great explosion and a great widening of the middle classes. All of this was the exact opposite to what Marx predicted would happen - he couldn't have foreseen the effects innovation and the feedback loops of mass production and consumerism would have on the modern world.

 

It's true that, in certain markets at least, the cost of innovation can be currently quite high (pharmaceuticals would be a good example), but computer technology would not be a good example. Because the profits there have been so consistently high they can afford to invest a lot in R&D and because of that there has been steady growth in resources (be it CPU cycles or storage or new hardware features - gfx, wifi, etc.), which has allowed for innovations in software (which are comparatively much cheaper to invest in - you just need a few clever people sat in front of some computers) to reap large profits (first off the PC revolution in the 80s to early 2000s, gaming, mobile software). Though like with the start of the industrial revolution there was an early period (50s-70s) which saw very high capital investments for steady productivity growth and relatively flat wage growth - the era of large monolithic companies like IBM. That whole innovation revolution of course had massive knock on effects in all other areas of the economy too.

 

The important thing to take away from all of this is you can't really predict the impact new technologies will have on an economy, Marx based his predictions on historical analysis of tradesmen, merchant capitalism and mercantilism, in addition to nascent industrial innovations (spinning jenny and so on). He made assumptions based on the past and present, not factoring in the new possibilities that would be soon opened up. As I've said a few times now, it's hard to fault him for this, but from our modern perspective we certainly shouldn't be fooled by it any more.

Edited October 1, 2015 by caze

[chenGOD]

With all due respect, you clearly don't understand Marx if that's your interpretation of historical materialism.

What Marx actually says (broadly speaking) is that the development of productive forces and economic activities is central to historical change and operates through class struggle over distribution.

 

His understanding of the factory, industrialization and technological growth is perfectly correct. "It is a means of producing surplus value".

How long ago do you think Marx lived? The spinning jenny had been around for 100 years by the time capital was published.

 

Have you read Capital?

[caze]

yes. you seem to be ignoring everything I'm saying and just resorting to ad hominems.

[caze]

and I'm well aware of when the spinning jenny was invented, why would you think otherwise?

[chenGOD]

Um, I don't think I've resorted to any ad hominems, but apologies if I have.

If you know when the spinning jenny was invented, why would you call it nascent in relation to Marx's understanding of technology?