Productivity: Where Marx Nailed it on Capitalism

Newsflash: Education (or the lack of it) is not why American wages are stagnant or falling.

The real explanation for stagnant or falling wages lies in productivity gains, and where those gains are flowing. Consider this report from Zack’s research: Darden to Install Ziosk Tablets at all Olive Garden Units in US:

Italian restaurant, Olive Garden, has announced that it has entered into a deal with Dallas-based Ziosk LLC to introduce tabletop tablets in all its U.S. restaurants. Ziosk is the manufacturer of ordering, entertainment and pay-at-the-table tablet. The company expects to install these tablets at all its 800-plus U.S. locations before 2015-end.

[snip]

The Ziosk 7-inch touchscreen tablets, working on Android technology, will offer facilities such as choosing from the company’s wide menu, ordering drinks, appetizers and desserts, and help guests to pay the bill easily.

Call me crazy, but I see millions of server jobs in restaurants about to go “poof.” And the servers who remain will perform such minimal service per table that they will no longer be considered tip-worthy.

And, no, Darden is not some outlier:

In fact, it is these benefits that have prompted Brinker International Inc.’s to install these tablets at its Chili’s location in the U.S. Another restaurateur, DineEquity, Inc., has also introduced Ziosk devices at its Applebee’s Neighborhood Grill and Bar restaurants.

What does this have to do with Marx? Plenty.

Marx predicted that an increasing share of the proceeds from production would flow to capital, with a correspondingly decreasing share going to labor.

And that’s what’s happening here. The ziosks represent a major increase in productivity. And there are further increases in productivity ahead, as ziosks take over more and more tasks now performed by servers.

And who will benefit from the increased productivity? Will wages increase? No. Will servers see reduced hours with no decrease in wages because of the increased productivity? No. Many servers will be downsized, total wages of servers will decline, and the wage reduction will translate into increased profit for Darden’s shareholders.

Is that all? No, it gets worse. You see, all those unemployed servers will have to compete for other jobs, thereby increasing the supply of available workers. What do you think that does to wages in those other jobs?

If you want an idea where all this may be going, check out Chris Hedges post at Truthdig today, Karl Marx Was Right.

Does it have to be this way? No. The impact productivity changes have depends upon the policies we as a society adopt. We could implement policies that cause those productivity gains to benefit everyone, as they did in times past.

The challenge is how to get there, given that those who hold wealth and power in America aren’t much interested in sharing.

11 responses to “Productivity: Where Marx Nailed it on Capitalism

  1. As Marx counseled, “Philosophy describes the world as it is. The point is to change it”. So are we to become total luddites and oppose technological advancements to end work drudgery? Why in gods name do we have a human being working as a waiter? We are way, way, overqualified to do this work. We should celebrate these advancements to free humanity from work! What we face is that, as Marx also predicted, when the productive relations impede the development of the productive forces, the productive relations (must give way or there is to be no progress).
    Capitalism is caught in its most intractable contradiction; the drive for ever higher profits cause an ever-shrinking demand for products. The demand side of the equation (consumer demand) is funded by wages, of course.
    Gus Hall, the preeminent US Communist made the observation in the late ’80’s in a pamphlet called “The Chip and Robot Revolution”. This was at the early stages of the application of computers and robotics to production. He predicted skyrocketing productivity and a resulting “redundancy” of millions of workers. Remember that one of the factors in evaluating productivity is “man hours”. As man-hours are reduced, productivity increases. It seems that in historical examples, wars were waged as a means to very effectively eliminate redundant workers and to keep them from becoming “socially restless”. Today’s hi-tech warfare just doesn’t do that job very well.
    Many of us are caught up in the struggle against the Trans-Pacific Partnership. We rightly suspect its secrecy and authorship by “600 corporations”. However, following the Marxist views of political economy, it could be easily predicted. Capitalists are constantly in search of markets. Sales! Sales! Sales! is their mantra. The TPP is an effort to standardize patent and other laws to protect capitalists from competition and to eliminate corporate barriers to markets. The TPP and other grand bargains on the horizon are an essential new level of productive relations that sweep away national boundaries with their cumbersome individual labor, environmental, and general corporate regulations in favor of “open markets” of consumers and labor.
    We must vigorously oppose the TPP as it will cause the expansion of global corporate entities that have no boundaries and no fetters. We must demand that productivity gains, a pool of unpaid wages be returned to the working class through corporate taxation; the public appropriation of the wealth that has been appropriated by the 1%. We must demand that that re-appropriated wealth be invested in our societies for the betterment of the masses through high quality free education; leisure pursuits and the arts; high quality healthcare; fast and efficient public transportation; quality housing; and sustainable energy and food production. A social-based model vs the corporate-based model will ultimately find the markets craved so deeply through planned projects to insure every human being has easy access to potable water, shelter, and food. Insuring every child has medical care and access to educational opportunities will insure the further development of the 21st century human being; one who adds value and demands a higher standard of living.

    • Certainly you make excellent points, Jim.

      My concern is that unless your message can be translated into stories involving real humans, nobody will hear it.

      This is why it was/is important to draw from Drew Westen’s research and insight on how to understand and effectively communicate with the Political Brain.

      We can take lessons on how to effectively message from observing Arpaio, Limbaugh and others of that ilk. Their message is wrong, but they know how to reach into the action center of their listeners’ brains.

  2. captain*arizona

    Anybody see the self driving volvo run the reporters over?

  3. I see this going the same way as banks over time. Decades ago I happened to live a block from the first ATM ever installed in the world, at Harding Mall in Nashville. Since I’m a geek, I usually was the only one using the ATM and it was Third National Bank. Everyone laughed at it and said tellers are a must. Fast forward to today, ironically I hate drive thrus and seem to be the only person now INSIDE a bank. And McDonald’s is putting in a 100% automated robot restaurant in Phoenix at 7th Street and McDowell, opens in July. So, anyone still wondering if those serving jobs will exist. Keep wondering while you get served only by a machine in ten years. Japan and China already have it, Japan because they’re robot crazy, in China labor is cheap but they crave anything far far out there after decades of repression by the stupid Mao Cultural Revolution.

    • I am glad you pointed out the ATM as an example of where these things could go. I hadn’t thought about that but the comparison is a good one.

  4. captain*arizona

    What is a threat to everybody’s job is the republican party. Next is corporate democrats free traders and corporations who buy both! Fox is now complaing that the reason their are so many killings in baltimore is that now the police are no longer alowed to murder unarmed black youth and are on a policing slowdown! The corporatists now have made cities dependent on the police killing unarmed black youth or lose control of a desperate population with out jobs or hope. So even when democrats get control the police will control the elected officials or allow chaos for the benefit of the corporate state. To allow faux news is like letting a rabid dog go around and bite people!

  5. If you go to a Chili’s Restaurant, they have those little kiosks on the tables already. I asked the servers if they saw it as a threat to their jobs, and they all said they don’t. Most of the time they still take the order, they always still serve the food, they still refresh your drink, and perform all those other tasks they have always performed. When it comes time to pay the bill, the kiosks are convenient only if you are using a payment card of some kind. You tell it what percentage of tip you want to leave and then swipe your card. The servers actually like the customers using them to pay and, in my case, the tip is the same I would always pay.

    I don’t know if these little kiosks are to be feared as much as you think. That little thing doesn’t take care of you as a customer. For me, that human connection is critical when I go out to eat or for drinks, and no machine will ever replace that. The convenience for paying is nice, but nothing beats a smiling face and good service.

    • Steve, Steve, Steve,

      Have you no vision? Of course these are not being rolled out in a menacing way. But where do you think it’s going long-term? As customers become more and more familiar with the ziosks, more functionality will be added. I understand that you like the personal touch, but you’re not concerned about the money you leave for a tip. Many people are. It will take time, but the ziosks will replace jobs. Lots of them.

      I actually learned about this listening to my car radio, and the piece actually discussed the gallows humor between servers and patrons. And when I was in Australia I experienced an advance form of this. All the server did was put the food on our table.

      Do you really think the giant restaurant chains are doing this to make customers and servers lives better?

      • (Sigh!) You are correct, Bob. I don’t have any vision on things like this. I can see it going the way you describe it and that is damned depressing.