Destruction of Value Marks Capitalism's End
Capitalism is the economic system of buying and selling based on the exploitation of human labor, which is the sole source of value. The elimination of labor power from production is destroying the source of all value, and thus, destroying surplus value, which is the source of all profits stolen from the worker by the capitalist. Without value, surplus value, and profits, capitalism cannot survive as a system. This article will discuss how the destruction of value marks the end of capitalism and of the value system itself, opening the way for a new society based on a new economic system.
The term "value" in political economy really means exchange value; exchange value expresses the ratio at which two different products of human labor exchange for each other. Value (or exchange value) exists in human society where people are organized with a division of labor for the production and distribution of goods and services. Value in this sense does not exist when humans live in isolation, or when a person produces only for his or own personal use.
Thus, value is a social relation that only exists in the process of buying and selling. It serves to allocate labor power and other scarce resources for both production and distribution under conditions where there is insufficient labor power to satisfy the needs of all. As society is able to produce abundance to meet all its needs, value disappears as a means of determining what is produced and who will consume and benefit from the wealth.
In the complex system of capitalism, value allocates scarce human labor to meet the immediate needs of society. It also unleashes the awesome power of human ingenuity to increase labor productivity through technology in production. As a result, society now has immense material wealth sufficient to satisfy human needs. Under capitalism, the capitalists own and control all the fruits of this increased labor productivity. Today, 567 million people live in countries whose gross domestic product is less than the wealth of the world's seven richest people combined. The polarity between wealth and poverty has never been greater.
Yet, labor is the one and only source of all value. The value of every commodity is determined by the amount of socially necessary labor time utilized in production. Socially necessary labor time is the quantity of labor necessary for production under average social conditions. The amount of value in a commodity over and above the wages paid to the worker is surplus value, all of which is created by labor, but stolen by the owner of the means of production, the capitalist, as the source of profit.
With capital striving for higher profits from the stolen surplus value, labor is in constant battle against capital's unrelenting drive to lower wages below a living wage. These wages are a monetary expression of the cost of labor power. Labor power is the worker; the worker is the source of potential or actual labor power; like the horse is the source of horsepower. Thus, the cost of labor power is the cost of maintaining a worker and his or her family, and capitalism as a system locks the worker onto a treadmill of poverty or the threat of poverty.
From capitalism's earliest beginnings in the textile factories of England to its domination of the global society, capitalists have been, and are, driven by competition to maximize their rate of profit in competition with other capitalists at the expense of the working class, and without concern for the consequence for human society. The highest rate of profit is the bottom line for all activities for an individual member of the capitalist class. As a consequence of this competition, each capitalist drives down the cost of production to increase profits through greater exploitation of labor and introduces new technology to cut labor costs and increase productivity.
The introduction of technology gives a competitive edge to the capitalist who first introduces the technology. But as the new technology is adopted by competitors, and the increased productivity and lower labor costs spread across the whole product line, the price falls in accord with the lower value and less surplus value is expropriated in the process of production. Thus, the rate of profit falls for all.
Capital's drive for maximum profits has led to the introduction of a revolutionary new means of production, thus opening up an era of social revolution. Previous technological advances were labor-saving. Electronic technology in production replaces labor. It lowers labor costs by replacing human labor with robots and with computer technology that controls and operates machinery.
Without any labor costs to the capitalists, robots on the assembly line work more efficiently than workers, and computer-operated tool and die makers are faster and more accurate than skilled mechanists. Labor is being eliminated from production, and thus the source of value and surplus value is being eliminated. The value of the labor power of workers whose job is performed by a robot or computer-operated machine is nothing to the capitalist class.
Further, these revolutionary new means of production cause a breakdown in the process of buying and selling that is essential to capitalism. Robots and computer-operated machinery aren't paid wages and don't buy anything; they produce but they don't consume. And, workers replaced by these means of production don't have paychecks. When workers are unable to buy, the capitalist is unable to realize a profit. The overall impact of the new technology is to drive the rate of profit down to zero.
As electronics eliminates human labor, it destroys the source of all value, and thus ends a system of production and distribution based on the exploitation of human labor power. Zero rate of profit and zero value of human labor power mark the end of the capitalist system of production and distribution, and thus the end of value as the means for determining what is produced and consumed.
Capitalism has come to its end. Something new is struggling to be born. For the first time in human history, abundance, not scarcity, can define human society. Only people can determine whether that abundance will be owned by a handful of capitalists, or by, and for, the good of the community as a whole.