When AI Replaces Human Labor: The Inevitable Fall of Capitalism

Many people, especially those who aren’t familiar with Marxism, might think that Marxism is about abolishing Capitalism, or that its purpose is to make Capitalism fall. But actually, that’s not really the case. Marxism, or Communism, isn’t about making Capitalism fall. It doesn’t have to. Because Capitalism will fall on its own. That’s what historical materialism tells us. Historical materialism explains this very clearly.

Now, what I want to talk about is how AI, Artificial Intelligence, will contribute to the downfall of Capitalism.

First, everyone knows that the essence of Capitalism is profit. It runs on that. That’s its engine. Production under Capitalism isn’t about producing commodities but it’s about producing profit. The core of Capitalism, its backbone, is what we call surplus value. Capitalism is an economic system based on the production of surplus value.

In Capitalism, we can break capital down into two: Constant Capital and Variable Capital. Constant Capital is the portion of the capital spent on things like machinery, raw materials, tools, infrastructure, etc.—things that do not create new value. Variable Capital, on the other hand, is the capital spent on purchasing labor power ( i.e. wages ). And this creates new value.

Surplus value, the source of profit, comes only from labor power. The means of production do not produce surplus value. Only human labor does that.

Now, when we talk about AI, we’re talking about an increase in Constant Capital, capital spent on machines and technology. The wages we pay to human workers (Variable Capital) is what actually produces surplus value. So if we start replacing more and more human labor with AI, at first, the capitalists might think it’s getting more efficient or more profitable. But in reality, AI doesn’t create surplus value. Only human labor does. So….

Let’s say, at one point, a capitalist system uses 50% of its capital as Constant Capital and 50% as Variable Capital. That latter 50% is what produces the surplus value. Now imagine they increase their investment in AI and machines. Constant Capital rises to 70%, and Variable Capital drops to 30%. If they exploit the remaining workers at the same rate, the overall surplus value decreases, because the Variable Capital, the source of surplus value, is now smaller.

Then, if 90% of production is done by AI, only 10% of the capital is Variable Capital. Again, less surplus value is produced, even with more exploitation. And finally, if AI takes over 100% of production and there are no more human workers left ( if Capitalism hasn’t collapsed already by that point) , then there is no Variable Capital, and thus, no surplus value at all.

No surplus value means no profit, and no profit means Capitalism can’t function. That’s how AI, in a paradoxical way, helps bring about the fall of Capitalism.

So in summary: Capitalism is all about producing surplus value—profit. But surplus value only comes from human labor, which is purchased through Variable Capital. The rest, which is Constant Capital, does not produce any surplus value. So when Variable Capital disappears due to AI replacing human workers, the system loses its ability to produce profit. And that is how AI accelerates the fall of Capitalism.

If the Industrial Revolution brought about the fall of feudalism, then the AI revolution is coming for Capitalism. Wow, historical materialism is just beautiful.

Now, about what happens after. Actually, to continue from the first paragraph, Marxism isn’t about making the fall of Capitalism, but it’s about understanding that Capitalism will fall, and about guiding humanity through that process—what to do, what system to build in its place (like Socialism), etc.

But personally, I tend more toward determinism. In that sense, I am not really a Marxist. Personally, I don’t know or understand much about what comes next. I just understand, very clearly, how Capitalism will fall. And maybe that means I don’t fully align with Marxism, because Marxism rejects pure determinism. I, on the other hand, am very deterministic. My philosophy in one sentence will be like: “Eh, things just happen, you can’t do much but watch.”

But still, my favorite line from Marxism is: “Men make their own history, but they do not make it as they please.”