Norbert Wiener, in the early 1960s, foresaw a parallel between the process of automation and the nature of magic as it has been depicted in countless fantasies, from Goethe’s tale of the sorcerer’s apprentice to W.W. Jacob’s Monkey’s Paw. The characteristic of magic in these stories is its literalmindedness. It grants to magic-users precisely what they ask, but this, in the end, is never what they intend or desire. The use of magic therefore brings ‘with it a host of unimagined dangers. ‘Automation,’ observed Wiener ‘. . . may be expected to be similarly literal-minded.’footnote1 In the mid-1980s that prediction seems particularly apt. For the past two decades, managers in advanced capitalist countries have regarded computer-based automation as the magical cure for two of their most pressing problems: the compulsion to reduce costs (particularly labour costs), and the need to increase the authority and control of the enterprise over its workforce.footnote2 In their pursuit of higher levels of automation, however, they have inadvertently initiated profound changes in the workings of the capitalist world economy itself: changes whose consequences were neither foreseen nor, for the most part, desired. On the one hand, the introduction of new technologies has contributed to rising levels of structural unemployment, and so to stagnant demand and worsening social crises in the industrialized world. On the other, the differing abilities of diverse societies to adapt to automation have aggravated international disparities in development and provoked increasing trade friction.

Automation, and the resultant economic changes, have also posed problems for the Left in the industrialized world. Social crises induced by automation have not resulted in an upsurge of radical political activity, but seem, more often, to have produced apathy, anomie and despair. The participation of workers in trade union movements is declining in many countries, while the most successful political offensives of the 1980s have come from the radical Right rather than from the Left.

One reason for this disarray lies, I believe, in the Left’s failure to apply serious analysis to the economic transformations implicit in the growth of automation and in the movement of large enterprises into information-producing activities. The most popularly influential interpretations have come from neo-conservatives who envisage a utopian information society where judicious use of technology will spontaneously resolve the contradictions of industrial capitalism.footnote3 In response to these fantasies, left-wing writers have commonly taken one of two contrasting positions: either they have denied that the contemporary ‘information revolution’ represents any fundamental change in the nature of capitalism, or they have argued that it spells the death agony of the capitalist system. Neither of these positions seems to me to be tenable. What is needed is, rather, new and critical perspectives on the profound economic changes through which we are living—even if, to quote Wiener again, this involves ‘a real risk of heresy’.footnote4

In an earlier article,footnote5 I tried to take a few steps in this direction by arguing that the growth of the so-called ‘information economy’ could be explained in terms of the labour theory of value. My starting point was Ernest Mandel’s hypothesis that widespread automation represents the ‘inner limit of capitalism’, since the reduced use of living labour power in production will ultimately make it impossible for enterprises to extract the surplus value which they need for survival and growth.footnote6 In contrast to this view, I suggested that, in a highly automated economy, surplus-value creation could be maintained, over a fairly extended period at least, by the channelling of living labour into ‘the incessant generation of new products and new methods of production’. This would explain why the spread of automation in most advanced industrialized countries has been accompanied by a so-called ‘softening of the economy’—the process whereby non-material elements such as research, planning and design come to constitute an ever larger share of the total value of output.

My arguments were subsequently challenged by Ian Steedman,footnote7 who accepted the urgency of discussing the consequences of automation but regarded the labour theory of value as an inappropriate framework. To demonstrate this, Steedman turned his attention to Mandel’s vision of an entirely automated economy. The traditional Marxian picture of total automation is one in which no labour is performed, and therefore no value is produced. Capitalism, and indeed economic activity in any meaningful sense of the word, ceases to exist. Steedman proposed, on the contrary, that by applying a simple, Sraffa-type model to a wholly automated economy, one could demonstrate that profits would continue to be generated. ‘What is revealed by full automation,’ he wrote, ‘is not the “inner limit” of capitalism, but rather the “inner limit” of the labour theory of value and surplus value theorizing.’footnote8