The Correlation Between Fall In Profit and the Deployment of AI Labour: A Marxian Analysis

Recent research shows that Artificially Intelligent Agents (AIAs) will increase the profitability of a company. Moreover, one research also claims that AIAs have the potential to increase economic growth rates by a weighted average of 1.7% across all industries through 2035. No doubt industries have benefited from the innovation of Artificial Intelligence (AI). On the contrary, there is also a body of research that contradicts these claims. Such research shows that with the advent of smart technology, profitability is decreasing. In the article ‘Artificial Intelligence and the Modern Productivity Paradox: A Clash of Expectations and Statistics’, Erik Brynjolfsson et al. (2017) argue that the discussion around the recent patterns in aggregate productivity growth highlights an apparent contradiction. Other research also echoes this concern. We find that economic growth in most developed countries, including the United States, is slowing down. Google, too, warns that the rise of AI may backfire on the company. So, the question is, why is the rate of profit of some companies decreasing? In this article, we attempt to find an explanation for this following Marx’s analysis of the ‘tendency of the rate of profit to fall’. We have shown that if Artificially Intelligent Agents as labourers replace human labourers, then there is a chance that the rate of profit may fall. We have illustrated this using an equation originally conceived by Marx. We conclude by showing that the apparent increase in the growth rate is either an illusion or is due to the successful deployment of the labour-capital hybrid model.