Can capitalism survive without workers? This was the question posed by Russian economist Mikhail Tugan-Baranovsky (1865-1919), best known for his history of economic crises in England, and for his influence on the development of modern business-cycle theory. His efforts to prove that underconsumption could never lead to an economic crisis led him to some startling conclusions. Writing in 1905, Tugan stated that:
If all workers except one disappear and are replaced by machines, then this one single worker will place the whole enormous mass of machinery in motion and with its assistance produce new machines — and the consumption goods of the capitalists. The working class will disappear, which will not in the least disturb the self-expansion process.
The question we address in this series of posts is, “Was he right?” Can the capitalist system go on unabated if the working class is replaced by machines? When we think about technological unemployment we naturally focus on the risks to the disenfranchised workers, how will they live without incomes, without jobs? A more interesting question may be, “Can capitalism survive without workers?”
To answer this we’ll first look at the simple mathematical models Tugan used to arrive at his conclusions. For this topic I am indebted to Paul M. Sweezy and his classic book, The Theory of Capitalist Development, where I found the above quote and first gained an understanding of the basic Marxian economics.
Tugan worked with three-department reproduction schemes (more on this later), but we will use the slightly simpler two-department scheme. It’s all a lot easier than it sounds, the math never gets any harder than 1+1+1=3, I promise.
In part two we’ll introduce a quick overview of Marx’s economic formulas, a prerequisite to understanding the reproduction schema. Our goal is to understand why, according to Marx’s analysis, capitalism cannot continue as it is when robots predominate.