The labor theory of value is not a substitute of supply and demand. To my knowledge, no significant political economist – certainly not Smith, Ricardo, or Marx, whose work I have closely examined – argue that supply and demand explains value. That would theorize in the wrong direction. Price is a specific form of value, a function of commodity-capital over against money-capital. Supply and demand is more effect than cause (allowing for feedback, of course); when in equilibrium, supply and demand explain nothing.
Concerning structural unemployment, the best way to measure this (short of doing a scientific survey of the workforce) is by calculating the rate of surplus value, the chief indicator of the organic composition of capital. The US government makes that calculation easy by periodically conducting a survey of manufactures. My calculations in the past have found that the rate of exploitation has increased, which means fewer workers generating the same amount of surplus value. This is occurring across sectors.
Over against the shrinking proportion of labor in agriculture and manufacturing (even while output in these sectors has skyrocketed), as well as the delinking of income from production, government and services took up the slack in much of the second half of the twentieth century. But government employment is dwindling – three-quarters of government workers are now private contractors in for-profit companies – and services are rapidly automating.
For the same reason that we have seen dramatic increases in agricultural and manufacturing output with fewer workers, we are seeing a secular decline in service sector work relative to the expansion of that sector. Just as it was the industrialization of both agriculture and manufacturing that eliminated most labor from those sectors, the progressive industrialization of services will eliminate most labor from that sector. Since the dawn of property and social class, there have always only been four (with only the mix changing). What sector will appear to soak up the army of redundant labor to give the enumerated work?
Far from the ideological picture of production portraying workers doting after machines, the empirical picture finds consumers doing the work workers used to do – and not getting paid for it or questioning why they are performing free labor. That the economy continues to appear to grow is a function of states pumping up the credit economy to compensate for the fall in real income and the associated development of financial products. But we are reaching the end of an epoch.
No herald of the end of work argues that this happens overnight or that it must happen in a complete way to precipitate crises. We already experience the crises – and they are worsening. The intermediate stage, with rising labor redundancies and declining real incomes, is marked by transfers of surplus value between capitalist-intensive production employing fewer workers existing alongside low wage, labor-intensive production. The impending collapse of late capitalism is forestalled only temporarily by this, the dynamic that identifies the last and terminal phase of capitalist globalization.
This dynamic, combing with the overgrowth of finance-capital, and the socialization of productive ideas, is sufficient to predict the end of the current global system. And the capitalist class knows it, evidenced by the frantic pursuit of enclosure, a desperate attempt to stave off post-capitalism. With it we see structural adjustment, the erosion of civil liberties, the intensification of surveillance, the expansion of police and military apparatuses, and the arming of reactionaries with arms and ideology. It’s called “neoliberalism.”
Will the collapse happen tomorrow? In the time scales of history, when we say something is rapidly approaching, we don’t mean literally tomorrow. Or next year. We mean sooner than later and inevitably. And don’t forget overshoot-and-collapse; we are threatening to exceed the planets carrying capacity. The cancer of capitalism will kill us one way or another. It will serve the people well to drop panglossian delusions that technology will create new opportunities for the continued exploitation of labor (an attitude that, even if true, is immoral) – or allow us to live sustainably. Instead, we need to organize to democratize the economy and turn it to different purposes.