The productivity paradox: How capitalism reproduces non-capitalist modes of production

Marxian theory states that productivity growth and capital accumulation inherent in the capitalist mode of production will eventually lead to it displacing all other modes of production. The article questions this premise and examines how high productivity growth can paradoxically sustain or even promote non-capitalist modes of production that coexist within the capitalist social formation. Uneven productivity growth and a lack of competition between sectors result in a shift in employment from sectors with high to those with low productivity growth. EU sectoral data show that this leads to an increase in employment in sectors where non-capitalist modes of production are more prevalent, while employment in high productivity growth capitalist sectors decreases. This underlines the fruitfulness of the concept of social formation, which enables the analysis of several coexisting modes of production and shows that the central internal laws of capitalism operate at the level of social formation.