In the capitalistic process of production profit is a fundament, however, with the mindset of maximization of profit – which reigned for decades and still reigns – this can easily be the death sentence for goods that are needed but are not profitable enough to be produced.
Modern technology could solve this issue and cover the needs – and even wants – that are unprofitable – 3D-printers.
I already thought for a while about 3D-printers and how they could be integrated into our day-to-day life and on an economic level. Then, while reading a passage of an article by Rosa Luxembourg (March 5, 1871 – January 15, 1919) this morning around 11 am, the idea jumped into my mind.
It shouldn’t be seen as a replacement of a production method, it is more a complementary process of production that isn’t covered by either private entities or the government.
Without any further ado, we shall now begin with the elaboration.
Analysis of the Organisational Problem
In order to find a solution to a problem, one must first analyze the problem and find the cause. As the introduction on the very top of the entry points out, the main cause is the unprofitability. This is also what Rosa Luxembourg explained in „The Accumulation of Capital, Section One: The Problem of Reproduction, Chapter 1: The Object of Our Investigation“:
„Societies which produce according to capitalist methods present a different picture. We observe that in certain periods all the ingredients of reproduction may be available, both labour and means of production, and yet some vital needs of society for consumer goods may be left unfulfilled. We find that in spite of these resources reproduction may in part be completely suspended and in part curtailed. Here it is no despotic interference with the economic plan that is responsible for the difficulties in the process of production. Quite apart from all technical conditions, reproduction here depends on purely social considerations: only those goods are produced which can with certainty be expected to sell, and not merely to sell, but to sell at the customary profit. Thus profit becomes an end in itself, the decisive factor which determines not only production but also reproduction. Not only does it decide in each case what work is to be undertaken, how it is to be carried out, and how the products are to be distributed; what is more, profit decides, also, at the end of every working period, whether the labour process is to be resumed, and, if so, to what extent and in what direction it should be made to operate.“ (Passage 4)
In economics this is known as marginal costing (Teilkostenrechnung). Elimination of a product may be the case when technology advances (such as it is the case with oldtimers where spare parts are hard to find) or the product isn’t even produced in the first place, because there’s not enough demand. Since not everyone chose or has chosen to attend economy school, here an quick example of marginal costing and why it is different from full costs accounting (Vollkostenrechnung):
Let’s assume there’s a company with the following data:
|Costs||Total||Apiece (2,000 total)|
The retail price (p) apiece is €30.00.
Now to the calculations:
If we calculate with full cost accounting, we get the following result:
Income = p – Kf – Kv = €60,000.00 – €30,000.00 – €50,000.00 = – €20,000
Apiece = p – kf – kv = €30.00 – €25.00 – €15.00 = – €10.00
However, if we calculate with marginal costing we get a different result:
Income = p – Kv = €60,000.00 – €50,000.00 = €10,000.00
Apiece = p – kv = €30.00 – €25.00 = €5.00
(source of example: Malte Jakob, Zusammenfassung BWL und VWL)
According to the first calculation, the company should immediately stop producing the good. Whereas the second calculation says that it is beneficial to continue the production.
If the company were to not continue the production, it would lose €30,000.00 (fix costs).
If the company continues to produce, it will only lose €20,000.
Even though a situation may be hopeless, the worst could still be prevented.
With that in mind, it is now easier to imagine why a company would stop to produce at a certain point. Once the variable costs cannot be covered anymore, the product is eliminated for good. This, of course, doesn’t help the perhaps thousands of people who still needed or wanted the good. Neither can it be expected that the company keeps producing these goods if it continues to lose money and cannot cover the losses with the gains of other goods (or isn’t interested due to profit-orientated reasons).
The same applies for new or current goods that are useful, but which demand – as Luxembourg pointed out – is too small to be produced by the private manufacturers (e.g. as it was the case with solar collectors before government subsidies).
However, it is clear that the government cannot always interfere either, since there’s a difference between potential for a new good (such as solar collectors) and a good only being needed by a few (e.g. repair parts for owners of oldtimers or people who own old technological devices).
Modern Technology as a Solution: 3D-Printers
By now, most people probably already know what 3D-printers are. You cannot just print 3-Dimensional objects with plastic, it is also possible to use other materials such as metal.
The downside is that they may be quite expensive, depending on the material that is being used, and it is very likely that several printers are needed depending on the size of the community (e.g. several villagers or a town).
Moreover, it does require knowledge to handle a 3D-printer, though that can be self-taught (tutorials like this) or an experienced person teaches others how to use a 3D-printer.
While 3D-printers are not able to mass produce, they fulfil their function by producing the goods that are currently required. No shipment required. And depending on the complexity, it can done within several hours or a day (unless several complex parts have to be combined).
In short: The means of production for specific items, that are otherwise not available, are now in the hands of the community.
Community-Owned Manufacturing Facilities (COMF)
Once a community got the 3D-printers they needed, the production can start. The materials must still be ordered, and the companies that produced them should inform the community about the supplier to ensure that there’s no loss in quality.
The operators of the 3D-printers in the COMFs need the correct models, therefore the government may have to step in to ensure that the downloadable files meet the safety standards. Regulations in that regard will still be required.
As community-owned facilities, the retail price should exactly reflect the material costs (whereby it is left to the community how they want to handle it). The factor profit ceases to apply, since the COMFs are not traditional companies that seek to compete with others to gain a foothold in the marketplace. If at all, they cover the costs of the material that was required to manufacture a product.
In its essence, it is a small on-demand factory controlled by the people of a community.
A variety of other goods can also be produced, if needed. Depending on the situation.
As long as the right materials are in stock and the right plans at hand.
Not only would it fix the issue that was pointed out by Rosa Luxembourg, it may also be very useful to abolish the throwaway society that causes a lot of waste (e.g. electronic devices) and closes a gap that can neither be filled by the government nor companies.
As it is with all ideas, this one need to ripe like apples on a tree. Perhaps, there’s even more that could be done but that didn’t come into my mind yet. Time will tell.
Constructive criticism is welcome, as always.