The Accumulation of Capital is a book from 1913 by Rosa Luxemburg which predicts the collapse of the AI bubble. Cool, right?
She describes how capitalist production is structured around the manufacture of commodities, the appropriation of surplus value from their sale, the realisation of that value, and then the endless recycling of that value in search of infinite growth. It's pretty heavy on words, but it's an absolutely killer book that's well worth a read.
It's the neverending greed for more more MORE where the analysis in the book starts to sound like a prediction of the AI bubble.
Expansion becomes a condition of existence. A growing tendency towards reproduction at a progressively increasing scale thus ensues, which spreads automatically like a tidal wave over ever larger surfaces of reproduction.
I think about that bit every time I open LinkedIn and see an AI startup revenue graph going up and to the right.
Anyway.
She talks about how the surplus value is the driving force behind it all, and explains that the goods themselves are almost incidental. That much is basically Lean Startup translated into marxist vocabulary. Then she drops this.
Conversely, capital may, within limits, yield a greater surplus value in consequence of a higher degree of exploitation such as is brought about by wage-cutting and the like, without actually producing a greater amount of goods.
Spookily prescient description of modern events IMO. In so many cases this AI "gold rush" is about growing margins in a negative way through the cutting of operational costs, rather than positive growth resulting from innovations that improve anyone's material conditions.
Trouble is, realising the surplus value from those bigger margins depends on society. Specifically, it depends on the people in society having money to buy anything. Here's a longer quote about that. See what I mean about it being quite wordy? Rewarding reading if you can challenge yourself to sit patiently with the text though, I promise!
But it is this very licence and anarchy of the commodity market which brings home to the individual capitalist that he is dependent upon society, upon the entirety of its producing and consuming members. The individual capitalist may need additional means of production, additional labour and provisions for these workers in order to expand reproduction, but whether he can get what he needs depends upon factors and events beyond his control, materialising, as it were, behind his back. In order to realise his increased aggregate of products, the individual capitalist requires a larger market for his goods, but he has no control whatever over the actual increase of demand in general, or of the particular demand for his special kind of good.
So, about that need for a market for the goods! Any reduced demand for labour resulting from AI carries an associated downward pressure on consumer purchasing power. In other words, if the computer steals your job[1], you're probably gonna buy less stuff, right?
This reduced purchasing power in turn is a potential crisis for a mode of production dependent on infinite growth. In other words, if enough people are buying less stuff because the computer stole their jobs[1:1], where's the next round of infinite growth gonna come from?
I think about that part of the book whenever I see that viral "AI money machine" graphic from Bloomberg. You know the one I mean.
Pick out one of those companies that's more directly exposed to changes in consumer demand. Microsoft, I guess? Then visualise the domino effect on this whole circular economy when slumping consumer demand fucks with their cashflow.
Contemporary mainstream commentary on the AI bubble takes a neoliberal perspective focusing on the business fundamentals of these companies. It tries to answer the question "is this a bubble?" and then justify its conclusions. Interesting, but superficial.
What I love about The Accumulation of Capital is that takes a more holistic perspective on the overall pattern of these boom and bust cycles. It gets to the core of the problem, which is the Groundhog Day inevitability of it all.
This periodical fluctuation between the largest volume of reproduction and its contraction to partial suspension, this cycle of slump, boom, and crisis, as it has been called, is the most striking peculiarity of capitalist reproduction.
Another great thing about this book is that it gets into the chain reaction mechanics of the crash in a way that I find really engaging.
Reproduction here depends on purely social considerations: only those goods are produced which can with certainty be expected to sell, and not merely to sell, but to sell at the customary profit. Thus profit becomes an end in itself, the decisive factor which determines not only production but also reproduction. Not only does it decide in each case what work is to be undertaken, how it is to be carried out, and how the products are to be distributed; what is more, profit decides, also, at the end of every working period, whether the labour process is to be resumed, and, if so, to what extent and in what direction it should be made to operate.
Assuming token pricing levels are currently unsustainable without all the investor cash sloshing around, it's not super difficult to imagine what happens if the tide goes out.
The most important element of The Accumulation of Capital though is the theme of imperialism. This is where the book gets into the consequences of the crash in a way I find contemporary commentary on AI weirdly uninterested in.
For capital, the standstill of accumulation means that the development of the productive forces is arrested, and the collapse of capitalism follows inevitably, as an objective historical necessity. This is the reason for the contradictory behaviour of capitalism in the final stage of its historical career: imperialism.
She gets into this whole bit about militarism and war economy after this that I find almost too upsetting to read. I wish this part of the book didn't also resonate so well with current events, where every tech billionaire you can think of suddenly has some kind of military thing in their portfolio.
Cool book though!
