Two new cold storage facilities currently under construction in the western suburbs of Melbourne provide an opportunity to consider some trends in the future of work under capitalism.
The state-of-the-art warehouses are being developed by rapidly expanding Dutch cold storage and logistics company NewCold Advanced Logistics, with the actual construction being overseen by local notorious anti-union builder Hansen & Yuncken, in the outer-western Melbourne suburb of Truganina.
With the help of the Victorian state Labor government, NewCold will establish its Asia-Pacific headquarters in Truganina and is looking to roll-out similar facilities in other states as well as New Zealand, Singapore, Malaysia and Hong Kong. The company already has facilities in France, Germany, UK, and Poland, and have just started construction in USA.
The specs: huge, state-of-the-art, fully automated The first warehouse is a giant freezer with the storage and loading docks to be at -23°C. It will stand at 34m high with a footprint of 176m x 100m and have a total storage capacity of over 102,000 pallets.
The second warehouse is a giant refrigerator with different compartments at +2°C, +8°C and +11°C. It will stand at 34m high with a footprint of 176m x 140m and have a total storage capacity of over 110,000 pallets.
Both facilities have the ability to handle over 10,000 pallets per day and have shipment buffer zones that can hold over 900 pallets at a time to create minimal waiting time for trucks before loading. The entire process will be computer controlled and automated using in-house control software developed by NewCold, and operate using state-of-art picking and stacker cranes and conveyor belt systems to handle the products from storage to the truck loading bays for distribution.
Multinationals leading the move
It will probably come as no surprise to readers of Vanguard that the giant multinationals are the first to get behind such new technology.
According to various reports, the first warehouse will be used by Canadian multinational frozen food company McCain Foods who have signed a 10-year contract with NewCold, and plan to store all the frozen products of their Australian arm in the warehouse by July 2017.
The New Zealand-based multinational Fonterra, the world’s largest dairy exporter, will occupy the second warehouse on a similar long-term agreement. Fonterra plans to consolidate its entire Australian distribution network and six existing warehouses under the one new fully automated warehouse in Truganina, a move that is sure to mean lost jobs for hundreds of workers around the country.
It’s a fact that didn’t seem to occur to the Victorian Premier Daniel Andrews as he talked up the creation of 127 full-time jobs across the two facilities. Considering the two warehouses will operate 24/7, a quick bit of math will reveal that at any given time of the day only a handful of people will actually be working at either warehouse. Their role will be primarily to monitor the computer systems to ensure they are operating smoothly and efficiently, as well as security staff.
The capitalist logic of technological innovation and automation
Capitalism is a system that depends on the creation of profit. It is only from that fundamental premise that we can fully understand the continuous and rapid development of technological innovation that capitalism enables. Karl Marx, as long ago as the mid-1800s, recognised some of the factors that led to this continuous technological change we see today.
Marx noted that capitalists in any given industry continually try to undercut their competitors by trying to produce their commodities more cheaply than their rivals in order to capture a larger share of the market, and therefore make a larger profit.
One way to do this is drive down the workers’ wages and increase their work load; a limited approach. A more effective method is to increase the overall efficiency of the production process by re-investing in new technology to produce commodities faster. This allows the individual capitalist to gain an advantage in the market place, though only temporarily, as before long their competitors will soon adopt the same new technology or develop even more efficient systems in order to avoid going out of business. This continual drive to realise more profit by ever more efficient production processes is a major factor behind the technological dynamism we see under capitalism.
However, all is not well. Fundamental to Marx’s understanding of capitalism is that the source of profit is surplus value which can only be added to commodities by being extracted from human workers’ labour-power in the production process. As the capitalists invest in ever more efficient technology reducing the average labour time necessary to produce an individual commodity, the ratio of investment in machines (constant capital) to human labour (variable capital) becomes more and more skewed. This means that the amount of surplus value embodied in each individual commodity produced becomes less and less. This phenomenon is what is referred to as the tendency of the rate of profit to fall.
And so, the central contradiction of technological advancement under capitalism is revealed. Human labour-power is the source of surplus value and profit, yet competition between capitalists compels them to replace humans with more machines and robotic labour, collectively undermining their own rate of profit.
Some future trends and what is to be done?
In the short term, very little will fundamentally change. There is still sufficient surplus value being produced through the whole system.
The workers who extract the raw materials, the workers who design and make the machines, the software engineers who write the computer programs, the workers who build the warehouses and facilities etc. all produce value. Importantly however, as the trend towards automation continues greater responsibility will fall on workers such as I.T and software engineers. It is crucial for unions and revolutionaries to throw off 20th century prejudices and to make serious headway into organising this sector of workers.
Longer-term, as automation gains deeper roots in ever more diverse fields, the systemic disruptions and potential for crisis will become more pronounced. Huge sections of the global working class will be made redundant and disposable, thrown in to long-term unemployment and their very existence made more precarious. For capitalism, this raises the question of who will buy all the products that technological efficiency enables. For revolutionaries, it poses important questions of revolutionary strategy. As greater numbers of the masses are removed from the point of production, how does the revolutionary party go about organising the masses for the revolutionary transformation of society that is needed for the sake of the planet and humanity as a whole.
Automation under socialism – the real solution
Automation in itself is not the problem. In fact, automation has the real potential to enrich the lives of the people by freeing them from a lifetime of menial labour, giving them the opportunity to realise their full potential as human beings. The real problem is the capitalist system under which it is developing. A system that puts the creation of enormous profits for a tiny few over the well-being of the vast majority of humanity. Only a system that can put the interests of the vast majority of the people first, and a system that can develop automation in such a way as to do just that, provides the real solution. That system is socialism.