Nearly full automation at Lego plant: What does it mean?

[Nothing Human Is Alien]

I was flipping through the channels on television late one night and I came across a documentary program on "super factories." They spent some time covering the Lego (http://en.wikipedia.org/wiki/Lego) factory. Constructed in the 1980's, the program claimed that it is fully automated. According to some company bureaucrat they interviewed, it needs "no workers," replacing an old system in which hundreds of workers made and sorted the tiny blocks by hand.

Things are done by robots. They do it all from beginning to end, following wires placed in the concrete floor for directional guidance.

I had to find out more. I did some searching today.

As this blog (http://gizmodo.com/5022769/exclusive-inside-the-lego-factory) page I've found notes, "From plastic grains to full sets, everything controlled by computers and robots..." (the author took a "rare tour" of the factory and has posted some video and other info -- he states that there apparently at least a few full of people around doing quality control).

I've been to automated plants before. But even places like the Miller plant in Milwaukee have a few dozen workers running the machinery, packing, etc.

The Lego factory is apparently well beyond that.

My question is what this means for the composition of capital (when constant capital apparently accounts for nearly 100%), surplus value & the rate of profit.

[La Comédie Noire]

I'm not a rigorously trained Marxist Economist by any means, but wouldn't it mean the rate of profit would stay at an extremely low level, almost at the margin, that is zero? I mean like ridiculously thin margins, to the point where if you even so much as stole a Lego you'd lose money.

[28350]

are the machines made of legos?

[Nothing Human Is Alien]

No. But if they were that would create a whole new set of problems.

[Jimmie Higgins]

are the machines made of legos?And have the legos become self-aware?:lol:

Sorry, I just love that idea that the sci-fi style robot-take over of humanity would come in the form of legos.

It's an interesting post though NHIA in all seriousness. I think what you and Noire are saying is correct - machines can't be exploited and so the introduction of more and more labor-saving technology exacerbates the falling rate of profit in the long run even if for now it might give them a short-term boost. I wonder if Lego's "brand" helps mediate some of that effect though - there may be less room for exploitation at the production level, but all the advertising and market dominance of this company might give them more elbow room.

If there was nearly full automation in cola production, for example, Coke could introduce new technology, save labor cost in the short run and make a lot of money so that Pepsi also has to invest in similar technologies - but then once they have caught up, both companies would be putting more money to technology overhead and have less workers to derive profit from.

[Rooster]

There has to be dead labour within this system. From the extraction of oil, to the chemical processes of making plastics, the shipping, the designing, etc. The actual living labour being consumed within the manufacturing process though, I guess, would be extremely low and there wouldn't be much in a way of a surplus being created, as has been said. I think the actual profits of Lego have been shrinking hugely since the 80s showing this. You used to be able to buy big buckets of the stuff now you only really see small packages in small quantities. Lego isn't very cheap either if I remember, so I reckon they get extra value from their brand recognition.

[S.Artesian]

This is the materialization of the famous alleged conversation between Henry Ford and Walter Reuther.

Ford took Reuther to a prototype section of an assembly line that utilized only machines and no workers.

Said Ford to Reuther "Well, Walter, who are you going to organize then when we have machines doing all the work?"

Reuther supposedly replied, "Well, Henry and who are you going to sell all those cars to when only machines are working?"

Of course, if Ford had read Marx, he knew what the answer would be-- "Well, to all those people who buy cars from automakers still using workers, as we'll be the cheapest manufacturer out there, but will be able to sell our autos at a point well above our costs, but below their costs, and we'll eat their surplus value for our lunch."

Three cheers for prices of production and three cheers for Volume 3.

Of course, Ford would have a lower rate of profit, but... in the struggle to achieve the general rate of profit, Ford would aggrandize GM, Chrysler, VW shares of that profit.

Not for nothing did Marx refer to capitalists as "hostile brothers."

[Nothing Human Is Alien]

I think we can see some of that with Lego expanding its market share* (It "is now the world’s fourth largest toy manufacturer ... Its global market share rose from 4.8% at the close of 2009 to approx. 5.9% at end 2010" - link (http://www.brickset.com/news/article/?ID=1173)). But what happens if/when that level of automation is achieved across the board in the toy industry? I doubt it will happen, but that's the real question I'm trying to get at here: what would full automation across an industry mean for surplus value and the rate of profit.

* Lego's fortunes didn't look nearly as good even a decade ago.. there was some sort of restructuring because of that.

Additionally, I think it's interesting that with Lego's growth in revenue in recent years it has hired more workers, and says it will continue to do so. I'm not sure where exactly these workers will go, but I did read somewhere that there are plans to open a new factory in Mexico. I don't think that plant will be anywhere near fully automated.

[Tim Cornelis]

The Romans could've initiated an Industrial Revolution, they had the means. But labour was too cheap (slaves), so they didn't bother.

If unions kept forcing wages up, we'd see more of these factories arise and at the same time class consciousness develop. Too bad trade unions are bureaucracies.

[S.Artesian]

I think we can see some of that with Lego expanding its market share* (It "is now the world’s fourth largest toy manufacturer ... Its global market share rose from 4.8% at the close of 2009 to approx. 5.9% at end 2010" - link (http://www.brickset.com/news/article/?ID=1173)). But what happens if/when that level of automation is achieved across the board in the toy industry? I doubt it will happen, but that's the real question I'm trying to get at here: what would full automation across an industry mean for surplus value and the rate of profit.

* Lego's fortunes didn't look nearly as good even a decade ago.. there was some sort of restructuring because of that.

Additionally, I think it's interesting that with Lego's growth in revenue in recent years it has hired more workers, and says it will continue to do so. I'm not sure where exactly these workers will go, but I did read somewhere that there are plans to open a new factory in Mexico. I don't think that plant will be anywhere near fully automated.


Well, the automated plant does not account for all of Lego's production, so the efficiencies it manifests become part of the general social average cost of production for Lego itself.

Complete automation everywhere? End of capitalism, clearly. This is in fact the conflict between the means and relations all wrapped up with nowhere to go. Kind of what led Marx to write-- the barrier to capitalist production is capital itself.

How this works itself out is of course with the tendency of the rate of profit to decline, leading to a decline in the mass of profits, making it impossible to valorize the entire capitalist process of production at a sufficient rate to avoid... contraction and recession.

[Rusty Shackleford]

does this mean that the final stage of lego production, the socially necessary labor time is virtually zero because no living labor is actually being applied to add value to anything?

[The Dark Side of the Moon]

Russian component, American component, all the same. Made in Taiwan.
Love Armageddon

But on a serious note: what workers buy legos in china or taiwan?

[Zav]

What this means is that Denmark and the Czech Republic have a bunch of unemployed people that could be running the factories. At least they aren't being exploited for their labour.

[S.Artesian]

does this mean that the final stage of lego production, the socially necessary labor time is virtually zero because no living labor is actually being applied to add value to anything?


No, it means the socially necessary labor time is only the labor time accumulated in the materials of production, and that no surplus value is added in the production, thus breaking the circuit of valorization.

[KC]

The rate of profit is not regarding individual firms:


"Since the capitals invested in the various lines of production are of a different organic composition, and since the different percentages of the variable portions of these total capitals set in motion very different quantities of labor, it follows that these capitals appropriate very different quantities of surplus labor, or produce very different quantities of surplus value. Consequently the rates of profit prevailing in the various lines of production are originally very different. These different rates of profit are equalized by means of competition into a general rate of profit, which is the average of all these special rates of profit. The profit allotted according to this average rate of profit to any capital, whatever may be its organic composition, is called the average profit. That price of any commodity which is equal to its cost price plus that share of average profit on the total capital invested (not merely consumed) in its production which is allotted to it in proportion to its conditions of turnover, is called its price of production. ... While the capitalists in the various spheres of production recover the value of the capital consumed in the production of their commodities through the sale of these, they do not secure the surplus value, and consequently the profit, created in their own sphere by the production of these commodities, but only as much surplus value, and profit, as falls to the share of every aliquot part of the total social capital out of the total social surplus value, or social profit produced by the total capital of society in all spheres of production. Every 100 of any invested capital, whatever may be its organic composition, draws as much profit during one year, or any other period of time, as falls to the share of every 100 of the total social capital during the same period. The various capitalists, so far as profits are concerned, are so many stockholders in a stock company in which the shares of profit are uniformly divided for every 100 shares of capital, so that profits differ in the case of the individual capitalists only according to the amount of capital invested by each one of them in the social enterprise, according to his investment in social production as a whole, according to his shares" (III, 186-187).

The average profit is nothing other than the profit on the average social capital; its total, like the total of the surplus values, and like the prices determined by the addition of this average profit to the cost prices, are nothing other than the values transformed into prices of production. In the simple production of commodities, values are the center of gravity round which prices fluctuate. But "under capitalist production it is not a question of merely throwing a certain mass of values into circulation and exchanging that mass for equal values in some other form, whether of money or other commodities, but it is also a question of advancing capital in production and realizing on it as much surplus value, or profit, in proportion to its magnitude, as any other capital of the same or of other magnitudes in whatever line of production. It is a question, then, of selling the commodities at least at prices which will yield the average profit, in other words, at prices of production. Capital comes in this form to a realization of the social nature of its power, in which every capitalist participates in proportion to his share in the total social capital....If the commodities are sold at their values...considerably different rates of profit arise in the various spheres of production...But capital withdraws from spheres with low rates of profit and invades others which yield a higher rate. By means of this incessant emigration and immigration, in a word by its distribution among the various spheres in response to a rise in the rate of profit here and its fall there, it brings about such a proportion of supply to demand that the average profit in the various spheres of production becomes the same, so that values are converted into prices of production" (III, 229-230).

[blake 3:17]

This pretty wild capitalist's wet dream. Yikes!

I don't know anything about the production of Lego, but it seems plausible. A friend who works for the Canadian Auto Workers told me some funny and fairly creepy stories about how a GM plant was being robotized and how some of the workers were being made to do their work in ways to make their work easier for robots to mimic. One woman was barred from putting a tool in her back pocket because it was an action that the robots couldn't do.

The irony is that the whole point of Lego toys is that you build stuff with it.

I've been spending a lot of time with some children who play Lego Universe, the Lego version of World of Warcraft, and there are all these people who build stuff out of virtual Lego. To maintain their 'property' they have to pay a certain amount of Lego Universe currency. It gets a bit like the Chinese prisoners forced to play Farmville: http://www.huffingtonpost.com/2011/05/27/chinese-prisoners-forced-to-play-video-games_n_868104.html

Marx predicted a lot of stuff, but I don't think he could foresee this shit.

[citizen of industry]

No one touched on monopoly here. Lego has pretty much a monopoly over the (lego?) industry, so doesn't that put them in a position to fix the commodity prices above their value? I've seen a couple competitors, like dai-block, but they don't compare to lego at all, and are much cheaper.

Actually now that I think about it, they aren't much cheaper, only a little cheaper. So since Lego sets the standard in the industry, the competitors undercut Lego a little but still sell higher than value? Perhaps due to the monopoly and brand image Lego doesn't have the competition problem, can automate and sell above value, as long as consumers are able to pay monopoly price.