Re: Estimating the surplus\Doug's question\Fred's comments

[Jurriaan Bendien <bendien@xxxxxxxxxxxx>]

> Paul or someone on the list...do you mean by
> unproductive labour, that labour which does not produce
> a profit for an employer of wage-labour?

In the capitalist mode of production, labour is "productive" if it directly
participates in the production of use-values as commodities which, upon
sale, permit the owner of capital to privately appropriate a surplus-value
(a net profit). If the goods are not sold, or not sold at a price which
realises a net profit, then the labour wasn't capitalistically productive.
The source of this surplus-value is ultimately always surplus-labour, and
capitalist development is predicated on the ability to extract
surplus-labour. What exactly the use-value (the object of human needs or
wants) happens to be, is basically irrelevant, except insofar as not all
use-values can, for technical or social reasons, be transformed into a
saleable commodity (Marx defines a use-value as an alienable object which by
its physical characteristics can satisfy a human need or want, i.e. it's not
simply a question of subjective perceptions of the utility of a good or
service as in neoclassical economics; some resources by their intrinsic
nature are difficult to appropriate privately, or it is difficult to
attach/maintain private property rights to them and transfer those rights,
hence they cannot easily be turned into saleable commodities).
>
> Are you saying that a single barber who owns his shop
> and employs nobody and who cuts hair for a price is an
> example of unproductive labour whereas a bunch of
> hairdressers employed by a chain for wages and whose
> accumulated services are sold at a profit are
> productive?

Correct, insofar as the concept of productive labour which Marx applies
refers to the capitalist mode of production only, not other modes of
production. A self-employed barber exploits only his own labour. But the
barber might perform surplus-labour himself as well, insofar as the wages he
pays himself, are less than his gross income, in which case the barber would
produce and realise a surplus-value from his self-employment, i.e. his
labour involves value-augmentation involving a new net product (Marx doesn't
really discuss this case, because he is concerned only with the capitalist
mode of production). Marx's argument however is that the general tendency of
capitalist development is to substitute employment of wage-labour by the
owner of capital instead of self-employed labour, i.e. to transform labour
which is maybe productive according to some other criterion, into
capitalistically productive labour. Although Marx does not say this, some
self-employed labour can be regarded as productive in the sense of creating
a new, additional surplus-value corresponding to a net addition to commodity
output, whereas other self-employed labour represents rather a transfer of
surplus-value.
>
> In other words, can services as well as material goods
> be counted as part of productive labour in this
> definition?

The answer is yes, both goods and services qualify as output of
capitalistically productive labour (actually, many services are actually
goods). But it depends on whether they can be transformed into saleable
commodities or not, and what type of goods and services they are. But Marx
says that no new value can ever be created in exchange transactions
themselves - consequently, the labour which operates these exchange
transactions, is not productive labour because it does not create net
additions to total surplus-value. At a microeconomic level, (at the level of
the firm) it does seem like productive labour insofar as a surplus-value
results from it. However, Marx argues this surplus-value does not represent
a new value added from a macro-economic point of view, but rather a
transferred surplus-value, i.e. he distinguishes between the mass of
alienable use-values produced as commodities, and financial claims to these
use-values. A financial service might of course also be a tradeable
commodity, and indeed a financial claim (an entitlement to income, such as
an equity or bond) might also be a tradeable commodity. But Marx argues
essentially that these financial claims are
fictitious/derived/pseudo-commodities if you like, their use-value consists
only in giving the owner the ability to appropriate tangible wealth in the
form of products, tangible assets or labour services, now or in the future.
In the case of unequal exchange, new surplus-values do seem to arise in
exchange, simply through "buying cheap and selling dear" but again Marx
argues that in this case, we are really contending with transfers of value,
and not with the creation of new additional values through exchange
processes. That is to say, claims to wealth are established through trading
institutions and practices, such that the gross income which the producer
receives, no longer reflects in any way the real final sale value of the
goods he produces; the final sale value is much higher, and this value
includes costs which represent appropriations of incomes by intermediaries
between the producer and the consumer, in the form of tax, salaries,
interest, profit or rent. Essentially, the growth of the mass of
unproductive labour reflects the growing power of intermediaries between the
original producer and the final consumer, i.e. the growing domination of the
production process by intermediaries who sole function consists in trading
and negotiating financial claims.

> And what does the productivity of capital mean?
> Can capital, of and by itself be productive?  I mean,
> is there is such a measure as say, output by unit of
> capital?

For Marx, talk about the "productivity of capital" is a type of reification,
a fetishistic attribution. Only human labour can be productive, capital
produces absolutely nothing, never mind advertisements about "letting your
money work for you". Money does not work, people do. I can give an example
of this: in the 1980s, workers at the Kawerau and Kinleith pulp and paper
mills in New Zealand went on strike several times (in one of those strikes,
we actually flew two trade unionists to our town to talk about the strike).
One of the owners of the mills complained that, because the mills were no
longer serviced and maintained (no labour was performed anymore), those
mills were actually depreciating in value meantime. If the plant and
machinery wasn't maintained by living labour, it deteriorated, and this
meant additional costs, and indeed there were costs simply in shutting down
the operations of the plant and machinery. Similarly, Marx remarks that the
actual maintenance of capital assets is a labour service which the owners of
those assets often get gratis (for free) as a by-product of the wage-labour
they hire to produce an output. The idea of "capital productivity" is an
idea of bourgeois economics, of neoclassical economics. It is a way of
describing the yield of capital, in terms of the relationship between
capital invested and the output value produced. Thus you can say, if I
invest X amount of capital, I get Y amount of output value. But neoclassical
economics lacks any clear idea about the source of new value added, it could
arise in many different ways, and therefore, all they can say in terms of
defining production is that "factors of production" (labour, capital and
land) are applied to materials in order to create an output. Productivity
could in neoclassical economics also be described in terms of the
relationship between labour costs or labour hours and output, in that case,
we are talking about labour productivity instead of capital productivity.
Marx's concepts of productive labour and surplus-labour are designed to
explain where exactly the new value added actually originates, and he says
this new value originates from production under the condition of an exchange
relationship between social classes which involves structurally unequal
bargaining positions, reflecting differential ownership of assets. The more
assets you have, then ceteris paribus the stronger your bargaining position,
the less assets you have, the weaker your bargaining position. This means
more labour can exchange for less labour, and that the product of labour by
X can be appropriated by Y by virtue of capital owernship of productive
assets.

The central question in the Marxian economic analysis as regards productive
labour is "which labour adds to the total net volume of surplus-value which
can be appropriated privately or by the state" ? This requires both an
analysis of the specific division of labour which capitalist relations have
established, an analysis of the processes of exchange and the intermediaries
involved in that exchange, and an analysis of the timing of transactions.
But it is very difficult to estimate the total volume of surplus-value,
other than as financial claims to wealth, which are however created both in
the production process and in the exchange process (Marx says capitalist
production is the "unity of the production process and the circulation
process"). Because bourgeois economics lacks any consistent idea about the
source of new value and new profits, this is reflected in social accounting
practice, and thus, when bourgeois economists calculate the new value added
for the product account, transactions and transactors are often presented in
such a way that certain components of gross income and outlay are ignored,
or else, aggregation principles are used, which do not reflect the real
relationships involved from a Marxian point of view. "New value added" is
basically gross output less intermediate consumption (goods used up in
production), but this involves concepts of "production" and "transfers"
which do not reflect Marx's concepts. The central idea of social accounting
is that the value of production must be equal to the incomes that it
generates, but a great deal depends on how we define "gross" and "net"
income, transferred income, and on how we actually allocate costs and
revenues. This definition must involve a view of transactions which is not
neutral, but which always reflects a specific idea of to what activities an
income can be actually attributed, and whether it is "earned' or "unearned"
income. This is a reason why the rejection of a theory of economic value is
idiotic, because a theory of value is always necessarily implied as soon as
we systematically try to aggregate prices.

Jurriaan