Productive and Unproductive Labor

glevy at glevy at
Fri Aug 4 15:25:01 MDT 1995

Concerning tanks, Jim J. wrote:
> 	Don't leave out of the equation the production of arms and
> equipment as commodities for sale to client regimes around the world.
> 	I'm assuming that this wouldn't be an option if the R&D and
> tooling costs weren't completely subsidized by the above unproductive
> relationship.

In practice, arms (such as tanks) are either sold by capitalist firms to
foreign states (with the blessing of the US government) or are purchased
or produced by the US government and then given to foreign states
(although something -- not necessarily wealth -- is expected in exchange).
Of note, is that these defense firms exists outside of the normal
competitive environment that exists in most branches of production. The
labor employed by the defense producers is unproductive regardless of
whether they sell their products to the US government or to the US and
foreign governments.

> 	 Also: isn't the fact of this _not_ being a bona fide *production
> of commodities* the basis of all the 'price'-gouging/pork-barreling (i.e.
> $200(?) hammers and $2000(?) toilets)?
Defense firms have a very significant luxury that firms in other branches
of production do not have. In the case of automobile manufacturers, these
companies employ productive labor to produce surplus value (and they also
employ unproductive labor as well).  However, the surplus value which is
produced can not be transformed into profit until the cars are sold on
the market.  Of course, there is always the possibility that surplus
value that is produced will not be realized in the manner anticipated, ex
ante, by these firms.  On the other hand, defense contractors (such as
tank-producing firms) are guaranteed a profit in advance by the state.
Generally, this works along the "cost-plus" principle whereby the firms
are gauranteed a certain rate of profit over and above their costs of
production. Any, yes Jim, this does relate to the question of $200(?)
hammers and $2000(?) toilets since the state is willing to purchase these
products at those prices from defense contractors but consumers (or other
business firms) would be unwilling to (one would think) pay those prices
if they were commodities.


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