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Of course. Such automation wouldn’t be sustainable under capitalism because the rate of profit would drop even further, but it would be entirely possible under

by lucian1900 5y ago

Of course. Such automation wouldn’t be sustainable under capitalism because the rate of profit would drop even further, but it would be entirely possible under a socialist economy that produces for use instead of for profit.

anamax 5y ago
> Such automation wouldn’t be sustainable under capitalism because the rate of profit would drop even further I get that you don't like profits (even though investment to do automation requires profits), but automation reduces costs which INCREASES profits and/or reduces prices.
- ClumsyPilot 5y ago
  "I get that you don't like profits (even though investment to do automation requires profits)" That's literally opposite of how accounting works, if you reinvest everything, your profit is 0%. Profits are what's lefts after Cost of good sold, reinvesting, etc. which you then may distribute to shareholders.
  - anamax 5y ago
    > That's literally opposite of how accounting works, if you reinvest everything, your profit is 0%. Wrong - Profit is revenue minus costs. See https://en.wikipedia.org/wiki/Profit_(accounting) https://en.wikipedia.org/wiki/Profit_(accounting) and all of the other definitions on the web. Reinvesting affects cash flow but not profits.
- lucian1900 5y ago
  One enterprise automating increases its competitive advantage for a while, thus temporarily increasing its profits. However, over time, all enterprises will either automate or fail. Since profits are a portion of the value generated by labour, as the proportion of costs attributed to labour drop, so do profits. There are secondary effects as well, as workers lose their jobs, their wages fall through competition and they can no longer afford to buy the commodities produced. This phenomenon is well documented historically, as the rate of profit has an overall tendency to drop which is more clearly noticeable after bursts of automation. https://thenextrecession.wordpress.com/2020/07/25/a-world-rate-of-profit-a-new-approach/ https://thenextrecession.wordpress.com/2020/07/25/a-world-ra...
  - anamax 5y ago
    > Since profits are a portion of the value generated by labour That's simply not true. Profits = revenue - costs. Revenue, what buyers pay, is based on perceived value. That perceived value may come from labor, but it can also come from some mechanical transformation (ie automation). It can even come from something else, such as color. (I'm assuming that red paint costs the same as blue and takes no more labor to apply.)
  - robertlagrant 5y ago
    You're over-valuing labour. Labour is one thing, but not everything. What you're describing assumes people can't get other jobs, which is not true, and that of competition, which is where multiple parties automate, and so profits decrease (because monopolies are bad).
robertlagrant 5y ago
> Such automation wouldn’t be sustainable under capitalism because the rate of profit would drop even further Not really. Successful automation increases profits. E.g. McDonald's touchscreen menus came about because minimum wage increased, and the value of labour became less than its cost, so investment in automation was required. What else do you think incentivises expensive, failure-prone automation attempts? It increases value and thus competitiveness in the marketplace of the automating company.

anamax 5y ago

> Such automation wouldn’t be sustainable under capitalism because the rate of profit would drop even further I get that you don't like profits (even though investment to do automation requires profits), but automation reduces costs which INCREASES profits and/or reduces prices.

ClumsyPilot 5y ago
"I get that you don't like profits (even though investment to do automation requires profits)" That's literally opposite of how accounting works, if you reinvest everything, your profit is 0%. Profits are what's lefts after Cost of good sold, reinvesting, etc. which you then may distribute to shareholders.
- anamax 5y ago
  > That's literally opposite of how accounting works, if you reinvest everything, your profit is 0%. Wrong - Profit is revenue minus costs. See https://en.wikipedia.org/wiki/Profit_(accounting) https://en.wikipedia.org/wiki/Profit_(accounting) and all of the other definitions on the web. Reinvesting affects cash flow but not profits.
lucian1900 5y ago
One enterprise automating increases its competitive advantage for a while, thus temporarily increasing its profits. However, over time, all enterprises will either automate or fail. Since profits are a portion of the value generated by labour, as the proportion of costs attributed to labour drop, so do profits. There are secondary effects as well, as workers lose their jobs, their wages fall through competition and they can no longer afford to buy the commodities produced. This phenomenon is well documented historically, as the rate of profit has an overall tendency to drop which is more clearly noticeable after bursts of automation. https://thenextrecession.wordpress.com/2020/07/25/a-world-rate-of-profit-a-new-approach/ https://thenextrecession.wordpress.com/2020/07/25/a-world-ra...
- anamax 5y ago
  > Since profits are a portion of the value generated by labour That's simply not true. Profits = revenue - costs. Revenue, what buyers pay, is based on perceived value. That perceived value may come from labor, but it can also come from some mechanical transformation (ie automation). It can even come from something else, such as color. (I'm assuming that red paint costs the same as blue and takes no more labor to apply.)
- robertlagrant 5y ago
  You're over-valuing labour. Labour is one thing, but not everything. What you're describing assumes people can't get other jobs, which is not true, and that of competition, which is where multiple parties automate, and so profits decrease (because monopolies are bad).

robertlagrant 5y ago

> Such automation wouldn’t be sustainable under capitalism because the rate of profit would drop even further Not really. Successful automation increases profits. E.g. McDonald's touchscreen menus came about because minimum wage increased, and the value of labour became less than its cost, so investment in automation was required. What else do you think incentivises expensive, failure-prone automation attempts? It increases value and thus competitiveness in the marketplace of the automating company.