Cooking the Books: AI, profits and Engels (2026)

The Cooking The Books column from the April 2026 issue of the Socialist Standard

City gents reading the business section of their Times (24 February) might have been surprised to come across a photo of Engels. Socialists would have been intrigued more by the caption ‘could AI create a new Engels pause, named after Friedrich Engels’. The term ‘Engels pause’ was not coined by Engels but by an economic historian, Robert Allen, to describe the course of economic development that led to the workers being in the situation described by Engels in his 1845 book The Condition of the Working Class in England.

Normally, a period of sustained capital accumulation should lead to some increase in working-class living standards, both because of employers bidding up wages as they compete for workers and because the increase in profits means they can afford to pay more. Allen noted that this had not happened in Britain during the period of rapid industrialisation from 1790 to 1840 as wages had stagnated. As in the period after 1840 wages did increase, Allen called this a ‘pause’ and named it after Engels.

Engels might not have regarded this as a compliment. He might have preferred the term ‘the Engels profit bonanza’ as, if wages stagnate in a period of economic growth, that means that profits will be more than they otherwise would.

The article in the Times, by its former business editor David Wighton, discussed two views of the possible economic impact of AI. He quoted a former Google executive as saying that ‘the most likely outcome is an economy in which corporate profits explode as labour costs fall, while workers’ share of output shrinks’. In short, another ‘Engels pause’. The opposite view was put by Jamie Dimon, the head of the bank JP Morgan Chase, who is quoted as saying that while AI will increase profits, ‘this isn’t like you’re going to build three points of margin and you get to keep it — you don’t’. Competition sees to that.

Who is more likely to be right? Critics of capitalism might be tempted to agree with the one-time Google executive as it would be another good argument against capitalism. However, Dimon has a point. His view reflects more accurately what happens when one capitalist enterprise makes extra profits by reducing its costs through some innovation and outcompetes its rivals.

‘An enterprise or industrial sector with an above average level of productivity (…) economizes in its expenditure of social labour and therefore makes a surplus profit, that is to say, the difference between its costs and selling prices will be greater than the average profit. The pursuit of this surplus profit is, of course, the driving force behind the entire capitalist economy. Every capitalist enterprise is forced by competition to try to get greater profits, for this is the only way it can constantly improve its technology and labour productivity. Consequently all firms are forced to take this same direction, and this of course implies that what at one time was an above-average productivity ends up as the new average productivity, whereupon the surplus profit disappears. All the strategy of capitalist industry stems from this desire on the part of every enterprise to achieve a rate of productivity superior to the national average and thereby make a surplus profit, and this in turn provokes a movement which causes the surplus profit to disappear, by virtue of the trend for the average rate of labour productivity to rise continuously’ (E. Mandel, An Introduction to Marxist Economic Theory.)

That’s the likely outcome of the spread of AI to production and business. A temporary increase in profits for the firms that are the first to use AI in their branch of activity but no ‘profit explosion’ in the sense of a general increase in profits for all firms which eventually adopt it.

Potential abundance (2026)

Book Review from the April 2026 issue of the Socialist Standard

Abundance. How We Build a Better Future. By Ezra Klein and Derek Thompson. Profile Books. 2025. 289pp.

The August 1970 edition of the Socialist Standard was a special issue with the phrase ‘A World of Abundance’ emblazoned across its front page. It featured a series of articles seeking to demonstrate how humankind already had the knowledge, the resources and the technology to produce an abundance of the things needed by all the people in the world but how their use and development were being held back by the economic and social restrictions of our present profit-based system of society – capitalism. How much truer this is now – more than 50 years on – given the vast further advances in knowledge and technology. Yet the same system still grinds on failing to use its potential and resources to satisfy everyone’s needs and instead condemning vast swathes of people to live in poverty, most others to get by on the insecurity of one month’s pay to the next, while permitting a tiny minority to enjoy untold amounts of wealth which they will always seek to increase.

So any discussion of this phenomenon or proposal to remedy it, such as promised by the title of this book by the two well-known American journalists Ezra Klein and Derek Thompson, can only be welcomed. This is especially the case as the book’s back cover is unequivocal in the view it expresses: ‘We have the means to build an equitable world without hunger, fuelled by clean energy. Instead, we have a politics driven by scarcity, lives defined by unaffordability.’ What’s not to like about such a statement?

More specifically the book’s authors allow themselves to imagine a breathtaking future in which, for example, climate change can be reversed by removing carbon dioxide from the air, overuse of land for growing crops and feeding animals can be remedied by ‘vertical greenhouses which feed far more people while using far less land’, and technology will permit ‘an economy with robots that build our houses and machines that take on our most dangerous and soul-draining work’. They consider furthermore that, with appropriate and effective use of sun and wind in particular, humanity has ‘the gift of abundant energy’ and, contrary to advocates of ‘degrowth’, is capable, if it uses that gift correctly, of supporting its current population (and more) without exacerbating ecological breakdown.

August 1970 Socialist Standard

Yet, despite such radically invigorating leaps of the imagination and the words ‘abundance and ‘better future’ in the title of this book, anyone thinking that the authors’ proposals for building that future will involve radically changing the society that currently exists so as to make that abundance available to all is in for a disappointment. That is not what they are calling for. Their quest rather is to explore the ways in which what they see as the bureaucratic excesses of capitalism can be reduced to make that system run more efficiently and less wastefully and thereby provide a somewhat better, somewhat less unequal system for most people.

They back this up with an admirable wealth of information, evidence and documentation. They have thoroughly immersed themselves in the details of capitalist organisation (especially in the US), thereby putting themselves in a knowledgeable position to critique its waste and inefficiencies on what might be called a micro level. But it is not their purpose to go any further than this, for example to challenge the system’s underlying profit imperative or to consider whether the best (or only) way of realising the potential for equality and abundance is a complete change of social organisation.

To be fair, however, the authors’ efficiency and anti-waste agenda is at least aimed at suggesting ways in which the existing system can, at least as they see it, be made ‘more equal’. So they are writing from what might be called a humanitarian perspective, looking for what they see as practical forms of adjustment to the system – ways, for example, of providing homes for the homeless, of making poor people less poor and of providing easily accessible healthcare. Most of this they consider achievable through state intervention in the economy, which they hope can lead to a fairer distribution of wealth and to more people having decent living standards, even if this means ‘fettering’ some producers’ ‘obsession with profit’.

The trouble is that experience in many different countries has shown that governments cannot ignore or overcome the economic laws of capitalism and its market and, if they try, via reforms of one kind or another, the success they have is limited. And if they go too far, this can trigger reduced investment leading to economic crises, recession and unemployment, leading them to change policies or be voted out of office. The simple fact is that, however governments may try to release the potential abundance that technology promises, the system presents them with insurmountable obstacles, since by its nature it cannot be redirected from profit-seeking to meeting people’s needs.

So, the limits of this book’s ambitions are clear to see, shot through as it is with acceptance of the status quo, of the system of working for wages and salaries, of buying and selling, of governments and governed, and of division of the world into those competing economic units known as nations. In stating that they would like to see us ‘align our collective genius with the needs of the planet and each other’, Klein and Thompson are certainly proposing an admirable goal. But it is one that can only be achieved after capitalism has been abolished and society reorganised on the basis of the common ownership and democratic control of the earth’s natural and industrial resources.

Howard Moss

Land reform in Scotland (2026)

From the April 2026 issue of the Socialist Standard

Since the inception of the Scottish Parliament, land reform has been a significant issue. It is widely recognised that there is considerable concentration of land ownership in Scotland. Typically, land reform is an issue in formerly colonised countries, where the occupying power has concentrated land ownership, such as in South Africa and Zimbabwe, to benefit the colonisers and exert control.

The concentration of land in Scotland, through the famous Highland Clearances, was a precursor and a part of the same process, appropriating land for the ruling class and sending people out to colonise other parts of the world.

According to the Scottish Land Commission: 1,252 owners hold 67 percent of privately owned rural land. Of these estates, 87 are estimated to be larger than 10,000 hectares (67 of these are in the Highlands), 667 are 1,000-10,000, and 371 are smaller than 1,000 hectares. There are 5.5 million people in Scotland.

As they note, this is not unusual:

‘Ownership of agricultural land is becoming increasingly concentrated in Europe, with one percent of agricultural businesses controlling 20% of agricultural land in the EU and three percent controlling 50%. Conversely, 80% of agricultural businesses control only 14.5% of agricultural land (European Economic and Social Committee, 2015)’.

Early in the parliament’s existence, the then Labour government passed laws to abolish the last vestiges of feudal land ownership – no longer requiring the payment of feudal duties and creation of outright ownership of land.

The Scottish Parliament took the opportunity to make changes, now it was no longer confronted by the power of landowners in the House of Lords. By 2004, it passed its first Land Reform Act, which included a broader right to roam than in England and Wales, and also introduced community right to buy, where populations up to 10,000 could register a right of refusal on land sales and transfers. This legislation also placed responsibilities on landowners for the management of their property.

The SNP have continued the process by passing further acts in 2015, 2016 and 2025. The 2016 legislation gave Scottish ministers the power to intervene in land sales. Some of this legislation was refinements of the process following human rights cases that upheld the right of private ownership against the provisions of the Land Reform Acts, particularly Salvesen v Riddell.

The 2016 Community Empowerment Act gave communities rights to intervene in disused or neglected land causing harm to communities (including urban properties). The 2025 Act includes a requirement to consider reasonable requests to lease land or convert parts of it into crofting land. This act also requires a plan which will improve biodiversity, adapt to climate change and contribute to net zero.

The large estate owners continue to fight a rearguard action, maintaining that large estates can be run more efficiently and with economies of scale (eg, when a part of the estate has a lean year, they can cross-subsidise from other parts of the estate to continue paying staff for maintenance and other costs).

Campaigners maintain that there is evidence that large estates stifle development, and concentrate power into a few hands:

‘Scotland’s current pattern of landownership frustrates economic development within fragile rural communities. Most of these responses were very general in nature but the overall perception was that because landowners have a very high degree of control over decisions about how land is used, they also have the capacity to either help or hinder economic development. The implication of this is that where local economic development is not regarded as a priority by the landowner, then it will not happen.’

Further, some landowners are perceived as ‘trophy’ owners, holding the land as a status symbol (mostly for shooting); whereas some charities are seen as hindering economic development in the name of conservation. As the land commission notes, ‘This indicates that the issue here is more to do with concentration of power and resources more generally, and that land holdings are acting as an outlet for the exercise of this power rather than its source’.

These frustrations reflect the desire of small-business folk and entrepreneurs who are locked out by their more powerful rivals. Indeed, part of the impetus behind land reform is securing the votes of rural population, including farmers and small-business people. The fact that the legislation is locked in with significant requirements for Scottish ministers to intervene, means that wealth and social connexion may, however, be the real determinant for how much, or how little changes. It will be interesting to see how much this will affect land held by the King in his own right (rather than as Crown land, which itself is managed by Scottish ministers and accounts for 35,000 hectares), such as Balmoral, and if ministers will be willing to impose conditions and lettings on any of his land.

So far, there has been little change in the pattern of land ownership, and sales and transfers of large estates are few and far between. Much as in land reform in many parts of the world, the power and right of property tends to chafe against any attempts to constrain it.

Where land is owned by public bodies, such as ‘Forestry and Land Scotland,’ commercial imperatives still apply, so the logic of capital predominates regardless of titular ownership. It is this logic that will continue to predominate even if the land is parcelled up into smaller lots.

Socialists want to end the private ownership of land and want to see it used rationally to benefit the needs of the whole community. That means, not state ownership or ownership by forestry commissions or trusts, but common ownership and democratic control.

Land being held in common doesn’t mean that people won’t be free to use their initiative to employ the land, but that under properly understood and agreed common and democratic rules, people would be able to co-operate to meet their individual and collective needs without all the layers of complexity and chicanery that come with the private ownership of land.

Pik Smeet

Escape from capitalism? (2026)

From the April 2026 issue of the Socialist Standard

On 13 February Krishnan Guru-Murthy interviewed Clara Mattei for Channel 4 News to discuss her book Escape from Capitalism: An Intervention which later circulated as a podcast.

In the interview Mattei argued that people are taught that capitalism is an economic system that arose spontaneously out of humans’ supposed natural propensity to barter, but in fact it is of relatively recent historical origin and was brought into being through violence and coercion. The state forced people off the land who, no longer able to meet their needs from directly working land, had no alternative but to work for wages.

Wage-labour, said Mattei, with workers creating more value than what they are paid as wages, is one of the two basic features of capitalism. The other is what she called ‘private investment’ for profit controlled by and for a privileged few; nothing is produced except in the expectation of ending up with more money than invested at the beginning. This means that ‘austerity’, in the sense of restricting how much people as wage-workers get to consume, is a structural feature of capitalism; it is not merely a policy pursued by some governments or the system not working properly but is the basis of the system. The logic of profit required that workers be denied direct access to what they need to live so obliging them to sell their ability to work for money to buy it; the money they are paid was never going to be enough to enable them to live without having to continue working for wages. Austerity, she concluded, was necessary for the system.

Good stuff. Questioned by Guru-Murthy, Mattei agreed that she was in the ‘Marxian tradition’ (she seemed to have deliberately used this adjective rather than Marxist, which is fair enough). What she particularly liked was Marx’s criticism of earlier writers who thought that capitalism was the natural economic system for humans; wage-labour and production for profit were parts of a system constructed by humans and so could be replaced by human action.

How, then, did she propose that people escape from capitalism? As well as being a professor of economics at Tulsa University in Oklahama, she is also the director of its ‘Forum for Real Economic Emancipation’. Here, she explained, she is running a pilot project to test on the ground an alternative. This involved encouraging people to take part in collective decision-making on economic matters, along the lines of ‘participatory budgeting’ practised in a number of cities in Brazil. Under this the local population are involved in deciding how money raised through local taxes should be spent. The implication is that in an alternative society to capitalism all economic decisions would be taken in this way, including in workplaces.

This brings out the ambiguity of the term she used to describe the second basic feature of capitalism, ‘private investment’. This could suggest that what is wrong with investment (as money used to initiate production) is not that it is money invested in production with a view to making more money but that it is controlled by a few at the top rather than democratically by all involved. What she seems to have in mind are factory councils as envisaged at one time by Gramsci (who she name-checks) and assemblies; these should decide democratically how the money obtained from sales should be allocated between individual workers, social amenities and new investment. In other words, a form of what has been called ‘market socialism’.

However, this wouldn’t be an escape from the logic of profit; it would mean that this logic would be applied by workers themselves rather than by their bosses as now. Escaping from capitalism has to mean escape from production for the market and the economic pressures this exerts on whoever actually takes the decisions at workplace level.

Adam Buick

Tiny Tips (2026)

The Tiny Tips column from the April 2026 issue of the Socialist Standard

‘Ukraine is being devastated… The threat of escalation to nuclear war intensifies. Perhaps worst of all, in terms of long-term consequences, the meager efforts to address global heating have been largely reversed. Some are doing fine. The US military and fossil fuel industries are drowning in profit, with great prospects for their missions of destruction many years ahead… Meanwhile, scarce resources that are desperately needed to salvage a livable world, and to create a much better one, are being wasted in destruction and slaughter, and planning for even greater catastrophes’.

[CounterPunch]

‘We really don’t have time for the Marxists, Leninists, Trotskyists, Bolsheviks, Mensheviks, Spartacists, Revolutionary Communists or whatever sect in Your Party to get their shit together in order to take on the challenges we face – they might never overcome their miniscule differences or the battle of the £1 newspapers,’ Mish Rahman, a former Labour politician-turned-Your-Party-insider who defected to the Greens last month, told Novara Media. Rahman said he doubts the differences between the two camps are as substantive as they’re made out: ‘[Sultana and Corbyn] are not far off each other [politically], it’s just a proxy war for control’. 

[NovaraMedia]

‘”They say they don’t have enough homes, but look at how many empty ones there are – [the council] just doesn’t want to fix and repair them,” says mother-of-one Vanessa. She lives on Central Hill estate in Lambeth but only in temporary accommodation and says she’s been left “in limbo”. Dozens of properties on the south London estate are unoccupied, one for eight years, and yet the borough has the third-highest housing waiting lists in the capital – something that Vanessa, who has been waiting for a social home for three years, describes as “outrageous”’. 

[BBC]

Los Angeles spent about $418 million on homelessness programs in 2025, yet only a small share went toward helping people leave the streets for good, according to the New York Post. A recent City Hall report suggests most of the money supports short-term services that manage homelessness rather than resolve it. 

[ZeroHedge]

In 2021, there were only two diagnosed silicosis cases in California. In 2025 there were 214. ‘The number of cases is rising rapidly’ Dr. Michaels wrote to me, ‘That’s the important point’. Here’s the more tearful description from Dr. Michaels..: The hallmarks of the disease: shortness of breath and diminished exercise capacity that progresses to an inability to climb even one flight of stairs. A short walk that should take just 20 minutes can take an hour. Working is difficult or impossible. People cough incessantly. They can’t sleep because it is difficult to breathe and they are kept awake coughing. Over time, people with more advanced silicosis require supplemental oxygen and can’t leave home without an oxygen tank. And they are at increased risk of dying from lung cancer. The crime behind this slaughter is that safer, profitable substitutes are available. 

[Common Dreams]

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