Increased Productivity of Labor, Law of

a universal economic law designating the savings in living and embodied labor—that is, the reduction in the socially necessary time for producing a unit of output and lowering its cost. Production, which takes place under different social conditions, always presupposes three basic factors: the means of labor, the objects of labor, and the labor force. The result of their interaction is the finished product. The efficiency of productive activity by living, concrete labor is reflected in its productivity. With time, there is an increase in the efficiency of the expenditure of living labor. K. Marx pointed out the operation “of a universal economic law, according to which production outlays constantly decline, and living labor constantly becomes more productive” (in K. Marx and F. Engels, Soch., 2nd ed., vol. 46, part 1, pp. 75–76).

The operation of the law of increased productivity of labor is manifested in different ways, depending on the socioeconomic formation. Under capitalism, the limits of the development of production and the increase in the productivity of social labor are determined by the aim of capitalist production—that is, by the spontaneous growth of capital and by the creation of surplus value (the fundamental economic law of capitalism). In introducing the achievements of scientific and technological progress, the capitalists are interested in saving not labor time but expenditures on the labor force. Marx emphasized that the development of the productive force of labor is important for the capitalists “only insofar as it increases the surplus labor time of the working class, not because it decreases the labor time for material production in general” (ibid., vol. 25, part 1, p. 290). The many negative features of a capitalist society, including anarchy of production, the competitive struggle, the economic crises of overproduction, the chronic underutilization of production capacity, and mass unemployment, result in low growth rates and uneven increases in labor productivity and obstruct the continuous rise of labor productivity.

Under socialism the law of increased productivity of labor assumes unconditional and absolute significance, as well as new, specific features. Marx wrote: “The saving of time, like the planned distribution of labor time in the various sectors of production, remains the primary economic law, on the basis of collective production. It becomes a law even to a much higher degree” (ibid., vol. 46, part 1, p. 117). Under public ownership of the means of production and planned economic development, increased labor productivity is in the interests of society as a whole, production groups, and individual workers. New sources and incentives for raising labor productivity emerge. In addition to material interests in the development of production and in increased labor productivity, moral incentives emerge and become stronger. The necessity and possibility of a steady increase in labor productivity under socialism are directly associated with the operation of the fundamental economic law of socialism. Rising prosperity and the comprehensive development of all members of society depend on the greatest possible development and improvement of production, as well as on increasing the volume of output by employing additional labor power in material production and by raising the labor productivity of persons already employed in social production. Increases in the social product based on increases in the mass of labor employed in material production are limited by a number of social factors, including natural population increases; the more rapid increase in the number of employees in the nonproduction sphere, in connection with the expansion of the people’s nonmaterial and cultural needs; the shortened workday; and the increase in vacations and holidays. Consequently, increased labor productivity is the main source for the growth of the social product. The conditions for the accelerated growth of labor productivity are created by the superiority of the socialist organization of production for using the achievements of the scientific and technological revolution, as well as by the unity of social and personal interests and by material and moral incentives for labor.