Nature builds no machines, no locomotives, railways, electric telegraphs, self-acting mules etc. These are products of human industry; natural material transformed into organs of the human will over nature, or of human participation in nature. They are organs of the human brain, created by the human hand; the power of knowledge, objectified. The development of fixed capital indicates to what degree general social knowledge has become a direct force of production, and to what degree, hence, the conditions of the process of social life itself have come under the control of the general intellect and have been transformed in accordance with it. To what degree the powers of social production have been produced, not only in the form of knowledge, but also as immediate organs of social practice, of the real life process.
An analysis of Marx’s Grundrisse fragment in comparison with the current development of generative artificial intelligence (AI) leads to the conclusion that capitalist countries, including China, are building the technological base of socialism. This process is occurring independently of political will, resulting directly from the development of productive forces.
In the analyzed fragment, Marx pointed to the moment when knowledge becomes a direct productive force, more important than physical labor. He termed this “General Intellect.” Contemporary AI models (LLMs, multimodal models) are the technical materialization of this concept. They are not merely tools, but aggregated social knowledge—trained on publicly available datasets, code, and literature. These models, possessing a generative feature, autonomously detect correlations and create new quality based on existing knowledge. Fixed capital (technology) is here taking over functions that were previously reserved for the human intellect.
The foundation of capitalism is the privatization of knowledge (patents, trade secrets) in order to generate profit for the capitalist. The current state of technology renders this mechanism inefficient:
To understand why artificial intelligence leads to a decline in the rate of profit in capitalism, we must trace the path of profit creation and how AI blocks it. This process occurs in three specific stages.
In capitalism, profit does not come from “selling dearer than one bought,” but from the production process.
The capitalist replaces a computer graphic designer with an AI image generator.
Here appears a key moment, often overlooked in analyses:
The system enters a state of contradiction:
As a result, we have an economy of infinite productivity (AI produces millions of services per second), but of zero profitability (no one earns from this because the commodity has become too cheap and ubiquitous). This is the moment when the capitalist mechanism of accumulation has exhausted itself because it relied on technology that abolishes the scarcity of goods.
If capitalists were to form a collusion and maintain high prices for AI services despite zero production costs, they would encounter three barriers that cannot be overcome in the long run:
This is Marx’s strongest argument. Capitalism is a closed circuit:
Price collusion works in the steel or fuel industry, where the barrier to entry is gigantic (one needs to build a steel mill or refinery). In the world of AI, the barrier is knowledge, which “leaks”:
In conditions where the production cost is zero (AI) and the market price is artificially high (collusion), the margin is astronomical (e.g., 99.9%).
Conclusion: Artificial price inflation amidst mass unemployment leads straight to a collapse in demand. The capitalist faces a choice: either lower prices and lose profit (end of accumulation), or keep prices high and have no one to sell to (bankruptcy). Both paths lead to the end of the system in its current form.
While the West treats AI as a tool for optimizing corporate profits, China has adopted a fundamentally different doctrine. Beijing is not waiting for the “invisible hand of the market,” but is actively steering the development of technology, treating it as a lever to change the systemic base.
In September 2023, Xi Jinping introduced the concept of “new quality productive forces” (xin zhi shengchanli ‘新质生产力’) into the discourse, which became the foundation of the 14th Five-Year Plan (2021-2025) and the foundation of the upcoming 15th Plan (2026-2030). In official documents and resolutions of the Central Committee of the Communist Party of China, a key definition appears:
“In a nutshell, the new productive forces are primarily driven by innovation, and break free from traditional economic growth modes and productivity development paths; they feature high technology, high efficiency, and high quality, and are advanced productivity required by the new development philosophy. They are shaped by revolutionary technological breakthroughs, innovative allocation of production factors, and deep industrial transformation and upgrading, with the improvement of labor forces, means of labor, subjects of labor and their optimal combination as underlying elements, and a substantial increase in total factor productivity as a core hallmark. Marked by innovation, and with high quality as the key, new productive forces are advanced productivity in essence” — Xi Jinping, CPC Central Committee Political Bureau session, 2024.
This doctrine is a direct application of historical materialism. The Party recognizes that traditional productive forces (cheap labor, extensive industry) have exhausted their potential. To move to the next stage of social development (according to Karl Marx), a change in the technological base is necessary.
In the report titled „A new journey to build a modern socialist country”, China explicitly points out that the goal is not just GDP growth, but the “basic achievement of socialist modernization.” The plan assumes that by 2035 China will become an innovation leader, and key technologies (AI, quantum computing, biotechnology) will cease to be commodities and become public infrastructure. Unlike the Western model, where AI is enclosed in “black boxes” of private firms (OpenAI, Anthropic, Google), the Chinese strategy envisions building a “National Computing Power Network.” The state invests in giant data centers intended to provide computing power (a new factor of production) to the entire economy, much like electricity or public roads are provided today.
A key element of the Chinese strategy, recorded in the decisions of the 3rd Plenum of the 20th Central Committee, is the necessity to “shape a new type of relations of production appropriate to the development of new quality productive forces.” This means preparing the legal and economic system for the moment when human labor ceases to be the main source of value. China, through state control over “big data” (treated as a national resource, not a private one) and investments in open AI models (open-source), de facto prevents the emergence of a monopolistic rate of profit typical of Western capitalism.
Through state investments in R&D and the promotion of open-source solutions, China may paradoxically accelerate the arrival of the post-capitalist era faster than the market economies of the West. They are acting according to the logic of historical materialism: developing technology to the point where the socialist distribution of goods becomes not so much a political choice, but a historical necessity.
Capitalists, striving to maximize profit through automation and artificial intelligence, are unknowingly sawing off the branch they are sitting on. They are creating tools that make the effective privatization of knowledge impossible and abolish the necessity of wage labor in its current form. If the system based on surplus value ceases to generate this value due to the universal availability of the “General Intellect” (described by Marx), capitalism in the form known to us will cease to exist. The question is not “if” but “when” the bubble bursts and the transition to a new phase of the historical cycle occurs.