The document discusses the consequences of industrial automation on capitalism and society. It argues that automation will: 1) Increase capital investment in machines while reducing labor costs, raising the organic composition of capital and lowering profit rates. 2) Force companies to exploit remaining workers at higher rates to maintain profits. 3) Theoretically lead to zero profit rates if factories require no workers. 4) Increase unemployment and reduce demand, harming society. Automation ultimately undermines the viability of capitalism by threatening long-term profitability.

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THE CONSEQUENCES OF INDUSTRIAL AUTOMATION ABOUT PROFIT
RATE IN CAPITALISM AND ABOUT SOCIETY
Fernando Alcoforado *
Article A Fábrica do Futuro (The Future Factory), available on the website
<http://ajmoreti.blogspot.com.br/2012/04/fabrica-do-futuro.html?m=1>, contains the
information that the factory of the future is characterized by presenting installation full
of robots and a high degree of automation, in addition to being properly organized
around technology, computer, that integrates, by specially developed software, virtually
all activities. In it there is the widespread use of tools such as CAD, MRP II, ERP, EDI,
and above all with the presence of the knowledge worker (the worker who uses more
than his hands).
The organization of production in the future factory is focused on the pursuit of higher
productivity. Activities that do not add value are eliminated, the waste and rework are
not accepted, the working methods have mechanisms to prevent problems, inventory
levels are very low, because the just-in-time is everywhere, that is, operates a
production management system that determines that nothing should be produced,
transported, or purchased before right time and the components are delivered directly in
the manufacturing lines and / or assembly. The factories are extremely clean and
organized, due to the systematic application of housekeeping that is one of the tools
used in order to ensure the implementation of quality, productivity and agility in
services, as well as improving quality of life for employees. Workers are trained in
various functions, from the operation, preparation and maintenance to the design of new
products and / or processes which are controlled by computers through integrated
software.
Today there are many factories of the future in full operation, such systems called lean
production, which emerged in Japan and are spreading throughout the world. The
worker's authority with regard to product quality is almost unlimited because it can, at
any time, stop the production line, once found nonconformity already occurred or latent.
All workers seek help in solving the problem so that the line back to normal as quickly
as possible. Identification methodologies and troubleshooting are widely disseminated
and incorporated into the culture of all workers. The management of processes is done
by using widely discussed performance indicators and accepted by all workers who are
closely linked to business objectives.
The project of products is developed together with the project of processes which will
be manufactured. The simultaneous engineering, which is a systematic approach to the
integrated and parallel development of a product design and related processes, including
manufacturing and support, is applied on a large scale. The attention to client objectives
guide the project, and the use of techniques such as quality function deployment (QFD)
and failure analysis (FMEA) ensures higher quality and reliability of products. The
products have a lower number of components, which reduces the risks of failure and a
lower cost, because the products are modulated. The layout is the key element of the
future plant. Large plants hitherto regarded as standard are divided into several smaller
units within the original factory, properly focused, organized into production cells with
a high degree of automation.
The new projects include areas for reduced stocks of raw materials and finished
products, and there is no forecast of areas for rework. Even areas reserved for products

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in processes are reduced because the lines are balanced so as to allow a continuous flow
and without accumulation in certain process points. This switching process allows bend
production using half the previously used area. In the future plant the information is
available in real time with the use of electronic control panels connected to multiple
data input terminals. The use of color is exploited to the full with colorful Kanban cards
to transmit one or more information about the progress of proceedings. The information
on production, productivity, achieved goals and to achieve, percentage of waste, etc.,
are arranged in tables spread across all facilities, to be read, analyzed and criticized
from all workers.
In the factories of the future the number of robots working in place of workers
multiplies every year and there are now studies that show how some professions may
disappear because of that [See the article Como serão as fábricas do futuro? (How will
be the factories of the future) available on the website <http: // delltecnologiasdofuturo
.ig.com.br / to-business / how-will be-the-factories-the-future />]. According to the
International Federation of Robotics report (IRF), about 179,000 industrial robots were
sold in 2013, an increase of over 12% over the previous year. China, according to the
balance of the IRF, is the country that has more invested in automation, buying 37,000
units last year while Brazil, for example, bought less than 1,500 units. Japan already is
the largest exporter of robots and also the country with the most automated plants in the
world, with more than 300,000 industrial robots in operation.
In the above cited article Como serão as fábricas do futuro? (How will be the future of
the factories?) contains the information that is possible to imagine that the factories of
the future will have less and less the presence of humans in the production line. Good
example is the Audi plant in Ingolstadt, Germany, which has about 800 employees and
nearly the same number of industrial robots that do most of the heavy and operational
work. In China, the robots incorporation in factories is increasing. Article A era das
fábricas inteligentes está começando (The era of intelligent factories is starting)
available on the website <http://exame2.com.br/mobile/revista-exame/noticias/a-
fabrica-do-futuro> contains the information that the automotive industry is among the
more robotic of the world. BMW in Leipzig in Germany, with more than 1,000 robots,
the workers, all blue vest, follow all the distance by computer screens. Humans only
supervise the work of machines. The Leipzig plant is a preview of the future of
factories. We are in the early stages of a profound change in manufacturing as the one
caused by the Industrial Revolution in England.
In the above-mentioned article A era das fábricas inteligentes está começando (The era
of intelligent factories is starting) is beginning contains the information that the global
manufacturing sector is in a process driven by three forces: the exponential
advancement of capacity of computers, the vast amount of digital information and new
innovation strategies. The computational progress made machines stay more powerful,
flexible and above all cheap. In 1985, the fastest computer in the world was the Cray-2,
which cost 30 million dollars. In his glory years, it was used for research on atomic
energy. Today, an iPad has processing capacity higher than the Cray-2. In the last
decade, the price of some sensor models used in electronics fell 85%. In industry in
general and in the specific case of the BMW plant in Leipzig, this trend can be felt by
the strong expansion of the robots.
In 2013, industrial robot sales in the world reached a record of 179,000 units. According
to a study by US consultancy McKinsey, the price of robots has fallen 10% per year in

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recent decades. And their productivity is increasing. Depending on the application, the
newer models are 40% faster than previous generations. High dexterity machines that
are now sold at US$ 150,000 would cost half that by 2025. The second feature of this
new industrial age is the vast amount of available digital information. The product
design, testing with new materials, the prototypes, the factory architecture, the
organization of the production line, the stock of materials, operating equipment,
everything is digital.
Automated and robotized plants mean industries with fewer workers. In three decades
were eliminated 6 million of manufacturing jobs in the United States causing
employment in factories reached the level of the 1940s The jobs that involve repetitive
functions will disappear rapidly in coming years, says economist Michael Spence,
Nobel Prize winner and professor at New York University. In rich countries, it is
estimated that 25% of all functions in the industry should be replaced by automation
technologies by 2025. Worldwide, it is estimated that 60 million jobs in factories will be
eliminated.
If we take into account that the profit rate is measured by the formula below:
l'= m'/ (coc +1)
where m'= m/v coc = k/v, being m' the rate of surplus value or rate of exploitation of
workers, m corresponds to the value of surplus labor unpaid by the capitalist to worker,
v relates to expenditure on wages, k is the constant capital (means of production, raw
materials, energy, etc.) used in the production process and coc corresponds to the
organic composition of capital. The consequences of automation on the capitalist
system are as follows:
1. Automation helps to significantly increase the constant capital (k) with investments in
automated machines and plants and significantly reduce (v) with the precipitous decline
of the workforce and expenditure on wages which causes the organic composition of
capital (coc = k/v) to rise enough. This causes the denominator of the rate of profit (l') is
significantly high.
2. To compensate for the increase in the denominator of profit rate (l'), its numerator
(m'= m/v) would have to increase greatly which would force the company to
significantly increase the surplus value (m = unpaid surplus labor) of the remaining
workers. The rate of exploitation of the remaining workers would have to increase for
the company to maintain or increase their rate of profit.
3. In practice, it would be impossible to have a fully automated factory, i.e., without
workers because company needs to monitor the operation and make the maintenance of
machinery and automated equipment. The rate of exploitation of such workers (m')
would have to be raised to the maximum to ensure high profit rates for the company.
4. Theoretically, if we assume that v = 0, this is a factory without workers, coc = k/v =
k/0 = infinity, contributing to the denominator of the rate of profit (coc + 1) is equal to
infinity. In turn, the added value being (m = 0) would result m'= m/v = 0/0 = undefined
value. The rate of profit would tend to zero or to an undetermined value.
It appears from the above, that automation is positive for the capitalist because it would
face its competitors a more competitive way given that provide, among other
advantages, increasing productivity and reducing costs. However, it would be extremely

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negative for the capitalist because it tends to reduce the profit rate of his business. In
addition, the automation that not only happens in the industry, but which spreads by
trade and service sector tends to reduce the income available to the mass of workers
excluded from production, thus contributing to the under-consumption of the masses.
There would be, therefore, fall in demand for goods and services due to rising
unemployment and the fall in the income of workers. The human society would be
highly harmed because the automation would contribute to the increase of the
unemployed army.
In short, the incessant and impetuous technical development, driven by competition
between capitalists obliges them to invest in automated machinery (constant capital = k)
that allows them to produce the same with less time to "work" (variable capital = v) .
Therefore, in their search for capital reproduction, capitalists tend to invest more in
constant capital (k) and less in variable capital (v) increasing tendentially the organic
composition of capital (coc) causing the profit rate has trend decrease. The main
conclusion related to the automation of productive activity is that it would collaborate in
order to compromise the interests of capitalism and that its viability should only take
place in a society that does not pursue profit.
* Fernando Alcoforado, member of the Bahia Academy of Education, engineer and doctor of Territorial
Planning and Regional Development from the University of Barcelona, a university professor and
consultant in strategic planning, business planning, regional planning and planning of energy systems, is
the author of Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova
(Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São
Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado.
Universidade de Barcelona, http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e
Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX
e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of
the Economic and Social Development-The Case of the State of Bahia (VDM Verlag Dr. Muller
Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe
Planetária (P&A Gráfica e Editora, Salvador, 2010), Amazônia Sustentável- Para o progresso do Brasil e
combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011),
Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012) and
Energia no Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV,
Curitiba, 2015).