Productive labour,technological development and the collapse of value

Abstract

Marx’s speculative reflections in the Grundrisse have inspired various interpretations concerning crisis and the potential end of the capitalist system. Among the more radical theses is the one put forward by Robert Kurz and others in the Marxist Wertkritik tradition. This article critically revisits the core assumptions underpinning the Wertkritik argument that capitalism is heading towards imminent collapse – an immanent contradiction triggered by the microelectronic revolution of the 1970s, which resulted in the (irreversible) crisis of abstract labour. While acknowledging capitalism’s crisis-prone nature, this article questions the more fundamental premises of the Wertkritik collapse thesis, scrutinises the assumption of a linear trajectory towards full automation of the production process and the consequent disappearance of all labour-intensive activities, and offers a more nuanced interpretation of the role attributed to relative surplus value in shaping technology-driven capitalist development. The analysis thus centres on the Wertkritik tradition, particularly the work of Kurz, providing a reassessment of the concept of productive labour advanced by this tradition and the dynamics of capitalist-driven technological development.

Introduction

In 1953, the German edition of the Grundrisse was published, eventually translated into various languages and sparking new interpretations of Marx’s critique of political economy. Rosdolsky’s publication of The Making of Marx’s Capital played a pivotal role in reigniting interest in this seminal text. The complete English translation ¹ in 1973 further catalysed the vigorous reinterpretation of Marx’s economic writings, with the ‘Fragment on Machines’ becoming a focal point (see Musto 2008). Among the most widely known reinterpretations of Marx’s ideas based on this rough draft emerged from the Italian autonomist tradition and its thesis concerning the crisis of the law of value. However, the most controversial interpretation was advanced by thinkers in the Wertkritik tradition, who formulated the thesis of capitalist collapse.

In this passage exploring the role of machinery in capital’s production process, Marx (1993) argues that the creation of use values by capital increasingly depends on the general state of science and technological progress, rather than direct human labour. Wealth progressively ceases to be a product of immediate labour and instead becomes the result of the so-called ‘general intellect’, that is, the ‘general social knowledge’ objectified in ‘fixed capital’ as a ‘direct force of production’ (see Marx 1993: 706). Paradoxically, the growing significance of science and technology in the production of wealth implies that the capitalist system would ultimately be digging its own grave:

To the degree that labour time – the mere quantity of labour is posited by capital as the sole determinant element, to that degree does direct labour and its quantity disappear as the determinant principle of production – of the creation of use values – and is reduced both quantitatively, to a smaller proportion, and qualitatively, as an, of course, indispensable but subordinate moment, compared to general scientific labour, technological application of natural sciences, on one side, and to the general productive force arising from social combination in total production on the other side – a combination which appears as a natural fruit of social labour (although it is a historic product). Capital thus works towards its own dissolution as the form dominating production. (Marx 1993: 700)

Drawing on these speculative notes, Kurz (2014), from the Wertkritik (value critique) tradition, argues that capitalism’s fundamental contradiction – and ultimate cause of collapse – lies in the growing discrepancy between value and material production brought about by technological advancement. That is, in the intensifying antagonism between the capitalist form of wealth (value) and the ongoing development of the productive forces. While these forces generate material wealth, they fail to contribute to value creation in the capitalist sense. Accordingly, the increasing substitution of human labour by machinery in the production of wealth entails a crisis of abstract labour, as it undermines the very source of capitalist form of wealth.

The crisis of the law of value is thus the result of science and technology becoming the predominant productive forces in wealth creation – without, however, serving as independent sources of value for capital. As human labour is progressively replaced by machinery, the system enters into crisis, since only human labour creates value. Central to this contradiction is the production of relative surplus value. The very methods that enhance labour productivity – and thus increase the rate of surplus value – ultimately displace value-producing labour itself. Kurz refers to this process – whereby capital destroys the substance of value itself – as one of ‘desubstantialisation’:

[. . .] crisis and an absolute historical limit to capital can only consist of a contradictory inner mechanism of the process of capitalist valorisation within which removes labour from itself, making it ‘superfluous’. In this way capital ‘desubstantialises’ itself, value is devalued, positing thereby an absolute inner limit not only logically, but also as a necessary historical empirical appearance. (2016: 120)

Capitalism’s ultimate limit is thus absolute: at a certain point, capital can no longer generate value to maintain the system. The system’s collapse is therefore inferred from the crisis of abstract labour, a crisis triggered by the obstacles encountered by capital in producing value after the introduction of science and technology into the production process, rendering human labour increasingly superfluous.

This set of conclusions diverges significantly from other traditional readings of the same foundational text. The Marxist autonomist tradition, for instance, also infers a crisis of the law of value from the development of science and knowledge. However, the reason here lies in the expansion of value production beyond the strict confines of the factory (see Pitts 2017; Tomba & Bellofiore 2014). For the autonomists, productive labour is said to have acquired a new form, encompassing not only labour time expended within capitalist firms by waged workers but also the labour of the multitude in the so-called ‘social factory’. It is the difficulty in measuring value produced beyond the factory walls that signals the increasing obsolescence of the law of value (see Hardt & Negri 2004; Negri 1991).

By contrast, the value critique tradition stresses the system’s inability to ground these activities in actual value production. The central problem is not the measurement of value following the incorporation of the ‘general intellect’ but rather the dissolution of the substance of value, resulting from the rising organic composition of capital and the declining presence of human labour in the direct production process. For the Wertkritik tradition, even if more labour enters the production process, it does so only indirectly – contributing to the social reproduction of society as a whole – while remaining unproductive in value terms:

In the ‘Fragment on Machines’, Marx suggests that, logically, the increase in productivity must reach a point at which it renders superfluous more labour than can be absorbed through the expansion of markets and production. At this stage, even the growth of relative surplus-value through individual labour-power becomes pointless, because the number of labour-powers that can be employed overall decreases too sharply. It can be shown that this point, which Marx had anticipated in the abstract, is reached both concretely and historically with the third industrial revolution. (Kurz 2011: 16) ²

While the autonomist interpretation of the crisis of the law of value has received considerable attention and provoked substantial debate, the value critique tradition’s conception of productive labour and technological development – upon which its theory of collapse rests – has received comparatively less scrutiny. Jappe, who also pertains to the Wertkritik tradition, argues for instance that ‘it is not only the visible reduction of labour in the contemporary world that causes the crisis of valorisation, but even more so the invisible decrease of productive labour’. (2023: 88). He also notes that although not all labour under capitalism is productive:

[. . .] in general Marxists have neglected it and even less so have they recognized its links to the crises of capitalism. They have thus abandoned this terrain to bourgeois economists, who would now have everyone believe that every job loss in traditional sectors (heavy industry, agriculture, etc.) is more than compensated for by new jobs and the fantastic earning opportunities that are opening up, and will open up even more in the near future in services, computing and so on, oblivious to the fact that this labour, whether ‘useful’ or ‘not’, is not usually ‘productive labour’ in the capitalist sense. (Jappe 2023: 86)

This article consequently interrogates and provides a comprehensive examination of the core assumptions underpinning the value critique (Wertkritik) interpretation of the crisis of value and capitalism collapse. The following sections of the article begin with a general overview of the value critique thesis of capitalist crisis and collapse, summarising its most basic tenets. The article then examines the claim of an irreversible decline in labour-intensive sectors and the Wertkritik underpinning conception of productive labour. Finally, it reassesses the hegemonic role assigned to relative surplus value in capitalist technological development.

Relative surplus value: the Achilles’ heel of capital

For the Wertkritik tradition, capitalists’ race to enhance labour productivity – that is, to increase relative surplus value through the adoption of new technologies – unintentionally undermines the very source of value in the system. The reason is that the drive to boost productivity leads to a rising organic composition of capital: constant capital grows relative to variable capital. As a result, the share of capital exchanged for living labour declines, rendering human labour increasingly marginal in the production process. According to Kurz (2014), the root cause of capital’s breakdown lies in this process. The production of relative surplus value entails the gradual depletion of value-producing labour itself.

This tension between the capitalist form of wealth – value – and the continuous development of the productive forces, is articulated by Marx in various manuscripts reflecting upon the tendency for the rate of profit to fall. In the Grundrisse, Marx states:

in the same proportion as capital takes up a larger place as capital in the production process relative to immediate labour, i.e. the more the relative surplus value grows – the value-creating power of capital – the more does the rate of profit fall. (1993: 747)

Similarly, in the Economic Manuscripts of 1861–1863, Marx observes that as the development of the productive forces coincides with a reduction in the portion of capital exchanged for living labour, the rate of surplus value may rise while the mass of surplus value declines. Consequently, the rate of profit falls because of the decline of variable capital relative to constant capital (Marx & Engels 2010b).

Accordingly, the same mechanism that increases the rate of surplus value also reduces the amount of labour that can be exploited with a given amount of capital. This creates a paradox: although the rate of surplus value rises, the total mass of surplus value may fall, resulting in a declining rate of profit. As Marx writes in the manuscripts of 1864–1865 (later published as Volume 3 of Capital):

The law of the falling rate of profit, as expressing the same or even a rising rate of surplus-value, means in other words: taking any particular quantity of average social capital, e.g., a capital of 100, an ever greater portion of this is represented by means of labour and an ever lesser portion by living labour. (2015: 324)

The contradictory character of the capitalist system is therefore embedded in a logic whereby the rate of profit declines not because ‘labour becomes less productive but rather more productive’ (Marx 2015: 344). The development of the productive power of capital is thus at the origin of the general tendency for the rate of profit to fall (Thomas & Reuten 2013).

However, Marx also recognised that ‘while the rate of profit will be inversely related to the value of the capital, the sum of profit will be directly related to it’ (Marx 1993: 748). That is, a declining rate of profit could be offset by capital reproduction on an enlarged scale. A larger capital with a lower profit rate may yield a greater mass of profit than a smaller capital with a higher rate – for example, a capital of 1,000 at 2% versus a capital of 100 at 10%. Rising productivity, therefore, accompanies the concentration and centralisation of capital, so that the fall in the rate of profit is compensated by a growth in the mass of profit (see Marx 1993).

For the Wertkritik tradition, however, this counter-tendency holds only at the level of individual capital – not for the system as a whole. Despite what individual capitalists may experience, an increase in the mass of profit cannot reverse the overall tendency of capital as a whole to produce a shrinking mass of surplus value, due to the declining absorption of living labour into the immediate production process. For this trend to be reversed, more living labour would need to be absorbed than is eliminated – a process requiring the creation of new branches of production and the expansion of wage dependency. Yet, the Wertkritik perspective maintains that this dynamic – where labour displaced in one sector is absorbed in another – reached its peak in the 1970s with the advent of microelectronics (Kurz 2014).

According to the Wertkritik, while the process of the scientific management of labour began with Taylorism and the introduction of the Fordist assembly line, the microelectronic revolution of the 1970s represents a turning point in capitalism’s historical trajectory. From that moment, capital could no longer expand by absorbing more labour than it eliminated. This technological threshold disrupted the old dynamic. Unlike earlier phases of development, microelectronics prevented the emergence of new labour-intensive sectors capable of offsetting the rising organic composition of capital. Having overturned the previous relationship between the displacement and absorption of labour, the rise of microelectronics heralded, for Wertkritik theorists, the beginning of value-collapse (see Kurz 2014; Trenkle 2014).

Thus, while the rate of surplus value may rise because of the enhanced labour productivity, the mass of surplus value diminishes at the level of capital as a whole. This is because the system fails to exploit as much labour as before. Accordingly, capital endangers its own valorisation process. Therefore, replacing living labour with machinery ultimately leads to the erosion of the working class – and hence to the exhaustion of value creation (see Kurz 2014):

From birth, the commodity-producing system suffers from a fatal contradiction in terms. On the one hand, it lives on the massive intake of human energy generated by the expenditure of pure labour power – the more the better. On the other hand, the law of operational competition enforces a permanent increase in productivity bringing about the replacement of human labour power by scientific operational industrial capital. (Krisis-Group 1999)

According to Wertkritik interpretation, the significant displacement of labour from the immediate production since the mid-1970s – resulting from microelectronics and automation – marks a historic turning point in the trajectory of capital (see Trenkle 2014). These technological innovations aimed at increasing relative surplus value foreclose the reintegration of surplus populations into new labour-intensive sectors, threatening the foundations of the capitalist system. Even when greater quantities of labour enter the production process, they do so only indirectly – contributing to social reproduction, but not to value creation (Kurz 2014). The same mechanism that increases the rate of exploitation thus undermines the very basis of the system: value-creating abstract labour.

Contested collapse: debates on the falling rate of profit

In the Grundrisse, Marx observes that the advancement of the productive forces entails a reduction in the portion of capital exchanged for living labour. As living labour becomes a smaller component of the production process, the rate of profit declines. Thus, while relative surplus value increases, the overall rate of profit falls. By replacing human labour with machinery, capital undermines its own process of valorisation. This dynamic provokes crises and leads to the violent destruction of capital. Over time, such crises recur on a larger scale, potentially culminating in the final overthrow of the system (see Marx 1993: 749–750). However, the claim that capitalism is headed for a collapse due to the falling rate of profit remains highly contested.

Heinrich (2012), for example, argues that a decline in the mass of surplus value indicates a falling rate of profit only if total capital does not also decline. If increased productivity leads to a fall in the number of workers and, consequently, a reduction in total capital investment, then the relationship is indeterminate: the rate of profit will only fall if surplus value declines more quickly than total capital. Conversely, if total capital falls faster, the profit rate might even increase.

Heinrich (3013) also suggests that the rate of profit can be raised through mechanisms such as savings in the use of means of production, a reduction in the value of raw materials or accelerated turnover times. Extended working hours, night shifts, or overtime also offer ways to counter-balance the falling rate of profit. In addition, while replacing human labour with machines may reduce the number of workers under a given capital, it can also cheapen the value of labour-power due to falling commodity prices – potentially enabling the same capital to hire more workers with the same investment. Heinrich goes to the point of questioning the very validity of the law of the falling rate of profit, claiming that Marx abandoned it in his later writings (Heinrich 2013).

Bellofiore (2013) similarly contends that although the extraction of relative surplus value entails the expulsion of workers from the immediate production process, this can be offset by strategies such as extending the working day, intensifying labour and multiplying simultaneous working days through new branches of production. Similarly, Thomas and Reuten (2013) point out that Marx’s treatment of the falling rate of profit is accompanied by a number of counter-tendencies that delay or mitigate the fall – such as the devaluation of capital, reduction of rent and the creation of new industries (see also Tombazos 2013). Marx also mentions ‘the omission of existing deductions from profit, e.g. by a lowering of taxes’, and ‘the creation of new branches of production in which more direct labour in relation to capital is needed, or where the productive power of labour is not yet developed’ (Marx 1993: 750–751).

Thomas and Reuten (2013) also argue that Marx’s thinking evolved over time, leading him to move away from the idea of an inevitable collapse driven by the rising organic composition of capital. The various counter-tendencies affecting the rate of profit are seen as evidence of a more cyclical conception of capitalist crisis in Marx’s later work – one that contrasts with the mechanical view of a gradual exhaustion of an original quantum of value. Crises, for them, function as mechanisms for restoring profitability during periods of over-accumulation. Accordingly, there is no fixed or original rate of profit that is steadily depleted; rather, the rate of profit may rise or fall depending on the prevailing economic conditions.

Tomba and Bellofiore (2014) also maintain that a falling profit rate can be countered by an increasing rate of surplus value, achieved through an exacerbated level of labour intensity. However, they argue that this leads to crises of overproduction: surplus labour produces excess goods that cannot be absorbed by existing demand. Here, the issue at stake for capital lies in the realisation of value. Bellofiore (2013) refers to this approach to crisis as a theory of disproportionality: socially necessary labour time must correspond not only to average production time but also to social needs. He thus proposes integrating Marx’s account of the falling profit rate in the Grundrisse with theories of overproduction and restricted mass consumption. A similar view is put forward by Heinrich (2012), who argues that capitalism’s drive towards limitless production leads to overproduction and over-accumulation. Crisis is thus interpreted not as a path to collapse but as a necessary mechanism for destroying capital and repressing wages, restoring the rate of profit. These crises re-establish profitability by adjusting the imbalance between production and consumption.

While these debates offer valuable insights into capitalist crisis and the falling rate of profit, they do not speak of the Wertkritik understanding of crisis as rooted in the exhaustion of value production itself. For value critique theorists, the essence of the crisis lies not in a relative, but in an absolute, decline of productive labour, leading to the suspension of value production itself. That is, the issue at stake is not merely the diminishing relative role of (value-producing) living labour in the production process, but its disappearance altogether. Kurz (2014) argues that when living labour is removed from production through automation and technological substitution, it must be reabsorbed into new sectors or capital must reproduce itself on a larger scale. Without such expansion, a rising rate of surplus value will coincide with a declining mass of surplus value. In this scenario, labour becomes more productive in generating material wealth but ceases to produce value due to the declining share of productive labour involved in immediate production.

This approach coincides to some extent with Caffentzis’ (2013a) claim that the falling rate of profit is a result of large-scale production, where fewer workers generate surplus value. Caffentzis (2013b) imagines an extreme case in which necessary labour time is reduced to zero and the working day is extended to 24 hours – a condition in which capital achieves its ‘paradise’ of full exploitation, only to fall into an ‘inferno’ of diminishing profits due to labour’s shrinking role compared with constant capital (p. 268). He also notes, however, that the growth of the service sector and the incorporation of social reproduction (particularly performed by women) into capitalist relations function as counter-tendencies due to their relatively low organic composition.

For Wertkritik, however, these counter-tendencies are historically limited. The temporary deferral of collapse through the expansion of new labour-intensive sectors or the commodification of non-capitalist domains is now seen as exhausted. According to the Wertkritik, we are currently living through a period of terminal value exhaustion: living labour is being expelled from the production process, while the surplus population is no longer being reabsorbed. Whereas in the past the self-abolition of capital was delayed by the emergence of new industries, this mechanism has reached its absolute limits (Kurz 2014).

Capital’s inability to reabsorb displaced, value-producing labour into new sectors ultimately threatens the foundations of value creation. The crisis of abstract labour, therefore, is attributed to the depletion of value production itself: with fewer workers in direct production, less value is generated. By increasingly relying on science and technology, capital undermines not only its own expansion but the reproduction of the value-form itself (Kurz, 2014, 2016).

Thus, if the conception of crisis and capitalist collapse rests on the structural exhaustion of value production, the disappearance of labour-intensive productive sectors, and an inevitable trajectory towards the complete automation of the production process, several questions arise: Who produces value for capital? Are labour-intensive activities truly vanishing? Can production ever be fully automated? Without denying the crisis-prone nature of capitalism, the following sections reassess the premises underpinning the theory of collapse.

Productive labour and the fate of labour-intensive services

Kurz’s (1992, 2014) thesis of capitalist collapse rests on the assumption of an irreversible trend towards the replacement of human labour by machines, leading to the disappearance of value-producing, labour-intensive activities. According to Kurz (2014), the development of microelectronics – and its capacity to automate production – is the primary force behind the elimination of living labour from immediate production. He argues that no new labour-intensive sectors have emerged since the 1970s that could compensate for the declining demand for human labour and the rising organic composition of capital introduced by the microelectronic revolution. However, this claim according to which value-producing labour is vanishing can only be made tenable if a wide range of labour-intensive service activities – now increasingly subsumed under the logic of value and resistant to automation – are excluded from the category of productive labour.

For instance, Jappe (2023) argues that although most new employment has emerged in the service sector – potentially compensating for losses in traditional industry – such work, while maybe socially useful, cannot be considered as productive in capitalist terms. In his view, the fact that activities such as cleaning are now remunerated changes nothing: tasks like care work are, by their very nature, unsuited to capitalist subsumption and its profitability criteria (Jappe 2023). As a result, the decline of the productive sector is interpreted as evidence of value’s erosion:

Value collapses just at the moment when it seeks to transform all human activity, every breath and every thought into abstract labour to counteract the exhaustion of labour itself. But most of these activities, including childcare, affectivity (which is also part of the ‘reproduction of the labour force’), and domestic activities, by their very nature, cannot enter the armour of value. (Jappe 2023: 95)

Yet how are we to explain, as Farris (2020) observes, the shift from the domestic servant model to profit-driven service companies, driven by a lucrative private industry that has identified business opportunities in domestic labour? The expansion of private firms in household services includes businesses ranging from small operations with five employees to large franchises with up to 500 (Devetter & Rousseau 2009: 299). While Méndez (1998: 118) identifies the emergence of ‘maid-service’ franchises as part of a broader transition towards service economies in post-industrial societies, Huws (2019) similarly highlights the marketisation of domestic labour, noting the transformation from household-based servants to profit-oriented cleaning firms. As Farris (2020) observes, this transformation is not limited to elite households: these companies also target middle-class families, whose demand for low-cost, professionalised services is growing.

While the presence of employment relations in the household does not, by itself, transform this labour into a source of value, the growing marketisation of domestic labour – with companies making profits out of it – does extend such activities into the sphere of value production. This subsumption of domestic labour, for instance, challenges the Wertkritik assumption that labour-intensive sectors are imminently disappearing (Kurz 1992, 2014) or that capital is incapable of subsuming social reproduction activities under the logic of value (Jappe 2023). In contrast to the idea that automation renders human labour obsolete, the persistence – and even expansion – of labour-intensive services such as domestic cleaning contradicts the thesis that labour is losing relevance in the age of machines. Rather than preventing the emergence of new labour-intensive sectors, recent technological developments may on the contrary have facilitated the subsumption of new activities – such as domestic labour – under the logic of value production.

Of course, domestic labour is not a new phenomenon. As Sarti (2014) shows, domestic service has long been a feature of European society, especially among the middle and upper classes. The number of domestic servants peaked around 1880–1881 and declined thereafter, stabilising in the 1920s and 1930s due to economic crises and policies encouraging female employment through domestic work. While the commodification of domestic labour is not unprecedented, the emergence of profit-oriented businesses in care and cleaning marks a new development. These companies have generated commercialised services at a scale previously unseen (Farris 2020), raising doubts about the idea that tasks like cleaning cannot be fully integrated into value production (contra Jappe 2023). As Devetter and Rousseau (2009) suggest, one might even draw a parallel between the shift from wage-based domestic service to commercialised cleaning firms and the broader historical transition from craft to industrial production. While domestic labour may resist subsumption, it is not categorically immune to it.

Why, then, did a profitable domestic sector take so long to emerge under capitalism? One possible explanation is limited demand or insufficient household income to pay for such services. Yet, as noted earlier, the demand for domestic workers is not new and was never confined to elites. Even middle-class households employed servants in the 19th century (Higgs 1983). Other barriers to commercialisation may stem from the labour-intensive, low-productivity character of domestic work, its resistance to automation (see Federici 2012), and its spatial fixity (see Yeates 2004). Benanav (2020) also notes that because productivity levels in services tend to be low, small-scale family operations can compete with large firms, provided they suppress their incomes to a minimum. In cleaning, for instance, workers have often operated independently and at lower cost, without firm-based mediation.

These constraints, however, did not prevent the recent growth of a profitable domestic services sector. This suggests that it is not the nature of domestic labour that prevents its subsumption by capital, but rather historically specific conditions – including technological ones – that delayed its integration into the logic of value and its temporal imperatives. Far from signalling capital’s self-negation or inaugurating its final collapse, recent capitalist-driven technological development may have enabled capital to expand into new domains through the commodification of previously non-capitalist forms of labour. In other words, capitalist technological development is not just unequivocally leading towards the disappearance of labour and the exhaustion of value.

Productive labour and the crisis of value

At the heart of predictions about capitalism’s collapse lies the very definition of productive labour – a definition that, if drawn too narrowly, supports the conclusion that value has been exhausted due to the disappearance of the category on which it depends. The notion of productive labour is among the most contested within Marxist theory. However, a detailed review of these debates – such as classification of workers in the circulation or financial sphere with regard to value production – lies beyond the scope of this article, as it would raise a number of issues than cannot be treated here.

It is therefore assumed that readers are familiar with these discussions (see Durand & Légé 2014; Hunt 1979; Izquierdo 2006; Passarella & Baron 2015; Savran & Tonak 1999; Smith 2018; Tombazos 2013; Tsoulfidis et al. 2019). The analysis will focus instead on the Wertkritik ‘materialist’ notion of productive labour – understood as labour producing tangible or physical commodity. The discussion over the proportion of unproductive to productive labour will also be set aside, to examine instead whether productive labour itself is disappearing altogether (rather than merely declining in relative terms) as a result of technological development.

For Marx, the material or immaterial character of the commodity could not be used to distinguish productive from unproductive labour (see Marx & Engels 2010a, 2010c). Yet, the claim that value-producing labour is vanishing can only be maintained if productive labour is equated with the production of tangible commodities or with specific concrete characteristics – namely industrial labour involved in physical commodity production under formal employment. While the value critique tradition does not explicitly exclude forms of labour not manifesting in a material or physical commodity from the category of productive labour, it implicitly does so by disregarding the expansion of labour-intensive service activities – often precarious and resistant to automation – from its analysis of value collapse. Jappe, for example, argues against claims that Marx only recognised material or industrial labour as the source of surplus value. He writes,

Marx’s distinction between productive labour and unproductive labour has come under heavy attack and is often accused of recognizing only material or even industrial labour as the source of surplus value to the exclusion of services and all immaterial labour that are supposed to constitute the bulk of labour today. This is simply false, as Marx never conceptually identified the question of the productive or unproductive character of labour with its material or immaterial content – even if the preponderance of material labour in his time suggested a quasi-empirical identity with it. (2023: 87)

Kurz similarly acknowledges that productive labour cannot be reduced to industrial labour. He notes the commodification of care as an example of capital’s logic extending into new domains:

The most outward consequences of this reductive logic have been visible for a long time, for instance in the monistic agro-industries, in the brutal continental transport of animals for slaughter, but also in the practices of social-care businesses – for instance, when elderly and ill people are treated according to the pattern of car wash facilities or the ‘tender loving care’ for the dying is subordinated to the time-management of economic rationalisation. In the practices of such agro-industrial factories, hospitals, and ‘care-gulags’ – as they have become known worldwide in rapid succession, leading only to scandals everyone is weary of – these are merely the tip of the iceberg of the logic of physical reduction that dominates the entire economic space-time, penetrating even into the pores of the social reproduction process. (2016: 109)

In spite of recognising this, the analysis of value production and its crisis continues to treat productive labour as if it were confined to industrial or material production. That is, the thesis of value collapse ultimately rests on a conception of productive labour that fails to fully recognise service sector work as value-producing, thereby narrowing the scope of its definition. How else can we explain the supposed disappearance of value-producing labour, if not by excluding forms of labour categorised as immaterial – particularly those performed in services? As Smith (2020) argues, automation affects only certain sectors, not the entire economy. Many service activities, such as care work, are difficult or impossible to replicate with machines (see Federici 2012). The belief that labour-intensive activities are vanishing due to automation therefore suggests a conception of productive labour that excludes activities not tied to material production or susceptible to mechanisation.

Antunes (2015) has already noted that the growth of the service sector challenges the collapse thesis. For him, the service sector is not independent but intrinsically linked to material and industrial work on a global scale. The capitalist drive towards the intensification the division of labour to boost productivity not only restructures tasks within the workplace but also reconfigures the broader social division of labour – freeing up labour-power for the emergence of new branches of production and the emergence of new capitals in previously integrated manual and intellectual activities.

However, recognising that service labour is connected to material production is not sufficient to establish its value-producing character. If framed only in these terms, value theory risks being misread as referring to the production of physical goods rather than an abstract form of wealth. Moreover, the confusion may arise that service labour is productive only if it results in a tangible commodity. As Heinrich (2012) emphasises, value-producing labour is determined not by its concrete content or physical output but by its specific social form. It is mistaken, he argues, to ground the distinction in the type of work performed or the nature of the commodity. All forms of labour expenditure can be abstracted from their particular content, and services can be exchanged in the same way as physical goods.

For Marx, productive labour is not confined to the production or exchange of physical objects (see Marx & Engels 2010a). In the Economic Manuscripts of 1861–1863, he provides a useful foundation for clarifying this point. In them, Marx identifies two definitions of productive labour in Adam Smith: one that sees productive labour as that which is exchanged against capital (not revenue), and another that equates productive labour with work fixed in a material, vendible object. Marx endorsed only the former distinction as correct. He explicitly states that productive labour has nothing to do with the sensuous-objective form of the commodity, criticising Smith’s assumption that productive labour must produce a material object, instead of the commodity’s existence as a determinate quantity of social labour (Marx & Engels 2010a). Marx also points out that immaterial labour may result in commodities existing independently of the producer, such as books, but not exclusively, as it happens when education is converted into a factory (Marx & Engels 2010c).

Furthermore, labour that disappears upon being performed – leaving no material trace – can still be productive if the capitalist recovers more than the wages paid. For example, a capitalist can profit from purchasing the labour-power of a performing artist by selling tickets to a concert. If the labour reproduces the value of variable capital (wages) and generates surplus value, it qualifies as productive (Marx & Engels 2010a). The worker has replaced the value of its own wage and yielded a profit. Therefore, this specific social relation can be reproduced anew. Accordingly, this labour has been exchanged against capital, making it productive labour (Marx & Engels 2010a). Conversely, some kinds of labour may be embodied in tangible commodities but still not be productive from a capitalist perspective – for instance, when a tailor makes trousers for a capitalist’s personal use. Although the work produces a commodity, the labour is not productive in the capitalist sense if it is bought for personal consumption rather than as value-creating labour (Marx & Engels 2010a).

Therefore, many tasks considered unproductive by Marx might, under a tangibility criterion, be regarded as productive. For example, tailoring or cooking performed for private individuals yields physical outputs; however, as long as the labour is paid from revenue rather than capital, it is unproductive (see Marx & Engels 2010c). Moreover, certain forms of labour may be commodified without resulting in any material or immaterial commodity that the buyer of this labour can sell – meaning the labour is not considered productive either. This is the case when labour is purchased for personal consumption, rather than by a capitalist for the purpose of commodity production. Although the buyer might be a capitalist, this is not essential; even workers may use their wages to purchase services. This, however, does not make them capitalists. In such instances, money is spent rather than increased – that is, the exchange value of the labour disappears in the act of performing the service, whether it involves cooking, tailoring, or cleaning (Marx & Engels 2010a, 2010c).

Labour, in fact, can be exchanged for money without thereby becoming productive labour. Ideal or hybrid forms of labour subsumption may contribute to misunderstandings of the concept of productive labour, particularly when workers whose labour is exchanged for revenue rather than capital set prices in relation to those of productive workers (see Marx 1990 [1867]; Murray 2016). Nevertheless, as long as the good or service provided is intended for personal consumption rather than the enrichment of a capitalist, it cannot be considered productive labour (see Marx & Engels 2010c). In such cases, money is spent like any other purchase for personal consumption – not as a means of generating profit. Money is not converted into capital, and the buyer does not act as a capitalist (Marx & Engels 2010c).

Marx (1990 [1867]) thus defines productive labour as labour exchanged for money as capital. This means the capitalist must not only recover the value advanced in wages but also obtain surplus value that valorises capital (Savran & Tonak 2024). Labour is therefore productive if it reproduces its own value and generates additional value (Marx & Engels 2010c). This is possible because capital does not purchase the actual labour performed, but the commodity labour-power. In this way, living labour, when consumed in the production process, can produce surplus value and thereby valorise capital (see Savran & Tonak 2024).

What ultimately matters, then, is not the production of material goods, but the production of capital. The disappearance of productive labour – labour that produces value for capital – cannot therefore be explained by the decline of material labour or the rise of services, nor by the intangible nature of labour’s product. Labour may result in a tangible good or leave no physical trace; it may meet real or imagined needs. But these features do not determine whether it is productive or unproductive (see Marx & Engels 2010c).

Moreover, Marx acknowledged that technological development would expand the unproductive class and reduce the workforce required for material production (Marx & Engels 2010c). However, this expansion does not preclude the simultaneous growth of productive services. Unproductive and productive service work can develop alongside one another. Marx’s emphasis on the growth of unproductive labour was intended to show how it is sustained by surplus value extracted from productive labour – thereby illustrating the intensification of exploitation brought about by technological advancement – rather than to suggest the imminent disappearance of productive labour.

Besides, it must be also clarified that the low-productivity characteristic of many labour-intensive service sectors, or the limited scope for further increasing labour productivity, cannot serve either as criterion for excluding these activities from the category of productive labour, contrary to what Durand and Légé (2014) suggest. The obstacles such sectors pose to capital accumulation, owing to the limited scope for increasing relative surplus value, are distinct from the conceptual determination of productive labour itself.

Accordingly, if we adopt a broader definition of productive labour – one that includes labour-intensive service activities – the value collapse thesis no longer holds. Including care work, cleaning and other services challenges the claim that value-producing labour is disappearing simply because fewer workers are involved in material production. Moreover, recognising these labour-intensive sectors as part of value production undermines the assumption that all productive labour is susceptible to automation. If services such as care work are acknowledged as productive, then the prospect of a total automation of value-producing activities becomes untenable.

The informal and precarious conditions under which many of these services are now performed does not exclude them from value production either. For Wertkritik, the rise of unemployment and the marginalisation of wage labour indicate the collapse of value. Jappe writes,

[. . .] the final state of capitalism is not characterised by the existence of an ever larger, even more revolutionary proletariat, due to the fact that the reduction of variable capital makes wage labour, and thus classical proletariat lose their importance. (2023: 95)

Kurz likewise states,

Since the beginning of the third industrial revolution in the 1980s, new possibilities for rationalisation have eliminated industrial labour from the production process as never before. (2011: 95) ³

This argument, however, risks conflating the crisis of formal, waged employment with a broader crisis of value. In Dinerstein and Pitts (2021) view, we are witnessing not the disappearance of work, but the growth of informal labour conditions in activities such as warehousing, logistics and mining – largely due to the rise of platform capitalism. Mies (2014) conceptualises this as the ‘housewifisation’ of the global workforce: a shift from secure industrial jobs to precarious, underpaid and informal labour mirroring the historical treatment of housewives.

Castel (2009) speaks of this transformation as marking a transition from a society of full employment to one of full activity – not the disappearance of labour, but the erosion of labour’s protective structures, such as stable contracts and social protections. In a similar fashion, RoyChowdhury observes,

[. . .] informal work is often seen as the domain of the self-employed, of petty trade and small enterprises. However, in many parts of the global south, there is a rise in salaried wage labour, (construction, global supply chains, contract work in large corporations and in services) though in informal employment conditions, that is, with unregulated wages and working conditions, absence of tenurial security and job-related benefits. In this context, there is possibly a need to redefine labour-capital relations within the framework of the intersection of the formal and the informal, particularly in view of the emerging centrality of global capital and global supply chains. (2023: 581)

If wage labour is not disappearing but expanding under more precarious conditions, can we really speak of a ‘crisis of value’? What determines whether labour is productive is not its formality or stability. Precarious labour, like secure employment, may still be productive in this strict sense – contributing to the valorisation of capital. In fact, today’s informal and unstable conditions may resemble those of Marx’s time more than the labour conditions of the Fordist era in core capitalist countries. As Antunes (2015) claims, the proliferation of precarious forms of work also contradicts the claim that value production is in terminal decline. Value production can persist – even thrive – under increasingly precarious conditions.

Technological development and the value production

The argument that capitalist development will culminate in the obsolescence of human labour has gained renewed attention in recent years. Many contemporary debates about the future of work see automation as a promising technology capable of freeing humans from the drudgery of work (Hanon 2023). Similar to the Wertkritik thesis, this perspective shares the view that technological innovation undermines the role of labour in capitalist production. However, the value collapse thesis interprets this trend not only as opening the possibility for a post-work future, but as evidence of the impending collapse – and self-abolition – of the capitalist system itself, due to the disappearance of value-creating labour.

For Kurz (2014), the production of relative surplus value is the defining feature of capital’s historical logic and the central engine of capitalist accumulation. However, it also harbours capital’s destruction, as it entails the irreversible elimination of human labour from the direct production process. Once absolute surplus value – achieved through the extension or intensification of the working day – reaches its physical and social limits, the extraction of relative surplus value becomes essential, positioning it as the primary driver of accumulation. Capital must then develop the productive forces to raise labour productivity and thereby expand surplus value. As productivity increases, necessary labour time is reduced, allowing capital to appropriate a larger portion of surplus value. Yet, even as this increases the rate of surplus value, it simultaneously reduces the total quantity of living labour engaged in production. The contradictory character of capital thus lies in this over-reliance on relative surplus value: the very mechanism that intensifies exploitation undermines its own foundation – human labour-time as the source of value.

Without denying the centrality of relative surplus value in the accumulation process of capital, the thesis that value is being exhausted through over-reliance on labour-saving technologies overlooks, on one hand, labour-intensive sectors less prone to automation, and on the other, the continuing relevance of alternative mechanisms for extracting surplus value. As Murray (2016) argues, capital may resort to forms of domination rooted in gender, race or geography to suppress wages and boost profits. Similarly, Tomba and Bellofiore (2014) stress that absolute surplus value is not a residual mechanism superseded by relative surplus value; both are intrinsically linked. Competition among capitals striving to increase productivity may compel others – unable to invest in advanced technologies – to rely instead on prolonging the working day or intensifying labour (Bellofiore 2013):

Capital’s higher technical composition in some parts of the world does not automatically give rise to a corresponding tendency. Rather, much as the development of the textile-industry in England lead to the extension of slavery in the Americas, capitalist development may produce, at one and the same time, a massive expulsion of labour-power within the Western metropoles (by which this labour-power is rendered precarious and underpaid) and a transfer of surplus-value to productive areas characterised by low wages, a low technical composition of capital and absolute exploitation. (Tomba & Bellofiore 2014: 356)

Alongside the persistence of absolute surplus value, Smith (2016) also highlights wage repression – or super-exploitation – as a further mechanism of surplus value extraction. For example, capital may increase surplus value by outsourcing labour-intensive sectors to firms employing cheap labour, rather than investing in machinery. In this scenario, surplus value is generated not by heightened productivity but through paying workers below the value of their labour-power. The introduction of machinery in some firms may also result in overwork and wage repression in sectors still reliant on older production methods. Firms lagging technologically may resort to suppressing wages to compensate for their competitive disadvantage, allowing labour-intensive sectors to persist through super-exploitation.

In the manuscripts of Capital Volume III, Marx (2015), for instance, identified the repression of wages below their value as one of several counteracting factors to the falling rate of profit – alongside the intensification of labour, extension of the working day and cheapening of constant capital. Although he excluded it from his core analysis due to the assumption that commodities exchange at their value, Marx nonetheless observed that wage repression ‘has exactly the same effect for capital as if relative or absolute surplus value had been increased’ (2015: 363). Hence, while technological innovation is crucial for increasing productivity, it is not the sole means of raising surplus value.

In his analysis of domestic industries – where exploitation, especially of women and children, was most blatant – Marx illustrated how sectors with backward production techniques could compensate by violating ‘every normal condition needed for working and living, and by the sheer brutality of overwork and night-work’ (Marx 1990 [1867]: 599). These extreme forms of exploitation were not precursors to industrial development but outcomes of it: surplus populations created by capitalist industry were absorbed into deeply exploitative, low-wage sectors. As Marx notes, ‘the surplus value created here depends not only on overwork and the appropriation of surplus labour, but also on direct deduction from wages, which are forced down far below their normal average level’ (Marx & Engels 2010c: 120).

Such overlapping of multiple forms of surplus value extraction calls into question the Wertkritik belief that relative surplus value represents the final stage of capitalist development. It also suggests that technological development may be driven by various imperatives beyond merely replacing labour with machinery. For example, it may aim to fragment production and facilitate outsourcing to low-wage countries (see Smith 2016), undermining the idea that labour is inevitably disappearing due to automation. Information and communication technologies (ICT) are illustrative in this regard:

ICT (information and Communication Technology), for example, has not only made possible vast labour-saving within the imperialist economies, it has played a key role in facilitating the integration of markets and the fragmentation of production and its shift to various locations around the world. The ICT sector has itself pioneered production outsourcing to low-wage countries, and the cheapening of ICT and other investment goods is itself in large measure the result of low-wage outsourcing. (Smith 2016: 152)

Technologies are not exclusively designed to replace living labour with dead labour. As Mies (2014) observes, communications technologies allow capital to relocate service-sector work to low-wage regions. In this scenario, surplus value is increased not through productivity gains, but by paying below the value of labour-power:

Thanks to the new communications-technologies, entire large parts of the service-sector can now be outsourced to low-wage countries. A number of airlines have already moved their accounting departments to India, and Indian software-firms are successfully competing with firms in the USA and Europe. (Mies 2014: 227)

The Wertkritik tradition’s disproportionate focus on labour-saving technologies obscures these complex drivers of capitalist driven technological development. Its thesis – that human labour is destined to disappear – fails to account for how many recent innovations aim not at eliminating labour with machinery, but, for instance, at globalising labour competition and exploiting wage differentials.

Besides, this tradition fails to account for how automation represents a geographically uneven process as many regions in the world continue to rely on labour-intensive production, often marked by low wages and informal employment to compensate the technological disadvantage. Moreover, it assumes that all forms of labour can be mechanised. Yet numerous service-based, care-related and affective tasks remain difficult – if not impossible – to automate. Technological development under capitalism, therefore, cannot be reduced to a linear trajectory towards automation. The persistence of many labour-intensive sectors directly challenges the prediction of an automated future.

It also suggests that technological development may be propelled by diverse motives – not only increasing labour productivity with labour saving technologies but also facilitating global labour arbitrage or enabling the subsumption of new spheres of labour into the realm of value production. As earlier sections have shown, capital has in recent years found ways, for example, to absorb new spheres of labour such as care and domestic labour. In this regard, technological development, instead of merely eliminating value producing labour, may have facilitated the marketisation of forms of labour, particularly in service sectors, historically considered beyond the reach of value production. In this sense, while the substitution of living labour by machinery may pose serious challenges to value production, it does not necessarily lead to its exhaustion.

Conclusion

This article has critically revisited the thesis of value collapse advanced by the Wertkritik tradition, particularly in the work of Robert Kurz. According to this tradition, the microelectronic revolution of the 1970s marked a decisive moment in the history of capitalism, setting in motion an irreversible collapse. Capital’s reliance on labour-saving technologies – driven by the pursuit of relative surplus value – undermines its own foundation: value-producing human labour. This, in turn, leads to the exhaustion of value creation itself. While the Wertkritik thesis offers a compelling critique of the contradictions inherent in capitalist technological development, its framing of an inevitable trajectory towards the disappearance of value-producing labour overlooks the persistence of labour-intensive sectors, the uneven global geography of automation, the various mechanisms for extracting surplus value and capital’s capacity to subsume new forms of labour because of the recent technological developments, such as information and communication technologies.

If we move beyond the Wertkritik narrow understanding of value-producing labour and the staged view of capitalist-driven technological development, we find that numerous labour-intensive sectors continue to thrive – especially in services that resist automation. The persistence and expansion of such sectors, increasingly subsumed under the logic of capital, suggest that value-producing human labour is not vanishing, even in an era of advanced technology. Moreover, the assumption that capitalist development follows a linear path of automation obscures the variety of mechanisms through which surplus value can be extracted. These include not only the continued relevance of absolute surplus value, but also strategies such as wage repression and the outsourcing of production to low-wage regions.

Besides, capital has demonstrated not only its ability to increase surplus value through the global relocation of production but also to subsume new spheres of labour – such as care and domestic work – into the market. In this regard, technological innovation is not exclusively motivated by the displacement of labour through machinery, but may also be driven by other economic incentives, such as the globalisation of production to exploit cheap labour. Likewise, capitalist-driven technological development may aim to facilitate the incorporation of new spheres of labour into the realms of value production. Rather than merely signalling the exhaustion of value, technological development may also function as a means of expanding capital’s reach into previously uncommodified spheres of life. Furthermore, the global proliferation of informal, precarious and low-wage work suggests that, far from disappearing, value-producing labour remains central to contemporary capitalism – even if under increasingly degraded conditions. The absence of formal employment or high productivity does not imply the absence of value production.

In conclusion, the crisis of value cannot be simply equated with the shrinking of traditional industrial employment. Nor can automation alone explain the trajectory of capitalist development. What we are witnessing is not the disappearance of value-producing labour, but its recomposition and expansion into new realms, facilitated by technological innovation. The challenge, then, is not to affirm the end of value-producing labour, but to understand the evolving conditions under which labour continues to sustain capital.