Capital and Labour / by Simmon Li

Just a thought. I've learned in ECO105 (which I am increasingly coming to realize taught me a lot of opinion) that labour should love new capital because it can boost productivity and that in turn means they can demand higher wages. I'm sold on labour productivity, but I'm not sure it's such a good thing. To be a bit more clear, within the framework of a an unlimited growth, capitalist mode of production, labour productivity is a fantastic thing, but there's one thing besides the whole "unlimited growth" implication that bothers me. Companies are increasingly moving operations to Asia for, as reported, the primary reason of "lower labour wages". So then ECO105's logic then doesn't fly because it assumes that lower wages = less productive. Is this the case? First, I think I'd have to look into Asian productivity numbers. Second, and this one is the kicker, just how does new capital and technological change (the infinite driver of growth within capitalist modes) interact with labour? If indeed Asian workers are just as productive as North American ones, wouldn't their labour prices increase? As far as rural manufacturing, this is happening, but at a slow pace, but I'm not convinced that it's the whole answer. Combined with competitive taxation rates, labour wages, and productivity, I got to thinking: just how dependent on labour is "new capital"? We were taught that we shouldn't "fear machines and automation because they improve productivity which means leverage at the bargaining table for wages." The assumption has always been that there needs to be someone operating those machines. In this day and age though, is capital self-sufficient, only requiring contracted (ie, short term) intervention, as opposed to the old, watchful eye of old. At least, that's the impression I get from a lot of the highly mechanised and automated capital formation. For example, your mfg plant hiccups due to some technical problem. How do you fix it? Well now, you hire for a short time some engineers to repair the problem. You could have a full-time paid position so they're on-call (ie, think data centre tech). Does the majority of manufacturing require people to man the capital any more? We're not having to manufacture chips or clothing like we have to tend to industrial farm capital (which is the one area I feel would still have fairly strong capital-labour relationship). Anyway, just writing this down for myself to think about, may add more.