Is Trade Productive?

Lou Paulsen wwchi at
Sun Oct 29 11:00:45 MST 2000

Some of the "Brenner debate," which I don't claim to have mastered yet,
apparently depends on conflicting ideas about the nature of "trade".  If I
am reading things right, the Brenner/Wood grouping treat "trade" as either
not necessarily capitalist, or as a subsidiary and historically unimportant
form of capitalism, "merely buying cheap and selling dear" to cite a Wood
quote from an earlier post.  We are encouraged to turn our attention away
from "trade" and toward other activities which are defined as "production"
if we want to understand the development of capitalism, because only in the
sphere of "production" do you have the element of extraction of surplus
value and hence of class struggle.  (If anyone thinks I am wholly misreading
this point, tell me.)

Marx did indeed view capitalist "trade" as non-productive.  Marx attempts
clearly to distinguish between the process of "production" of commodities,
in which surplus value is produced and embodied in the exchange-value of the
commodity, and "costs of circulation" of the commodity, in which parts of
that surplus value (created by the producing laborer) are then expended on
the tasks of taking the goods to market and so on.

Thus, if you are talking about manufacturing televisions, you might have the
following situation.  (I am going to inexactly assume that the value of
labor can be measured in dollars, rather than in gold, and that the value of
the television is equated to its current selling price in dollars.  These
approximations and terminological failings don't bear directly on the

Total selling price of the television: $100
composed of
$10 - raw materials, amortized cost of the factory, etc. (constant capital)
$90 - value of the labor of the workers who assembled the raw materials,
which is subdivided:
         $10 - wages of the production workers
         $80 - surplus value

This surplus value might be distributed as follows:
$75 - cost of packaging the television, shipping it to the warehouse of the
retail chain by truck, wages of the truck driver, maintenance of the truck,
amortized cost of the warehouse, wages of the warehouse workers, reshipping
it to the store by air freight, wages of the airline workers, prorated share
of maintenance of the airplane, amortized cost of the store, wages of the
workers in the store, wages of security guards to make sure nobody steals
the television, advertising the television, and some 'traders' profit' for
the retail chain and transportation firms; all this being lumped together by
Marx as "costs of circulation".
$5 - profit for the owner of the television manufacturing company

Now, the way these figures appear in practice is that the retail chain buys
the television from the manufacturer for $25 (raw materials + wages +
profit) and sells it for $100.  The retail chain makes some money by "buying
cheap and selling dear".  But in Marx's view the television was really WORTH
the $100 the moment it was completed.  The transaction between the
manufacturer and retailer is merely a way of distributing the surplus value.

All the wage-workers at the warehouse, the store, the advertising agency,
etc., are (in this view) "unproductive" workers in a technical sense,
because their labor does not contribute to the value of the television.
This would seem to raise the question of whether they are directly
"exploited" by the capitalists who employ them, since those capitalists are
taken not to be extracting surplus value from them.  Someone who tried to
take Marx very seriously and concretely on this point might then go on to
dismiss the struggles of these "unproductive" workers (to organize a retail
workers' union, say) as of secondary importance, since these struggles are
separated from the process of production.  [Similarly, if colonial "trade"
and pillage are taken to be "unproductive", they might get dismissed from
consideration in the process of capitalist development.]  This raises
questions in my own mind as to whether Marx understood this issue rightly.

In fact, Marx's argument for distinguishing "costs of circulation" from
"productive labor" is rather brief.  It's clearly not where he was
concentrating his mental effort at the time.  The bottom line is that I
personally believe that he was wrong on this point.  I don't believe Marx
was wrong on a great many points of economic analysis - in fact, this is the
only one I can think of.  But I do really believe it is a mistake to attempt
to separate "labor of circulation" from "labor of production".  I think
"circulation" IS part of "production".  I think the truck driver and the
warehouse workers and the air freight handlers and the workers in the store
ARE producing surplus value and ARE exploited directly by their bosses.  I
believe this because I believe the REAL product that is being sold in order
to realize the surplus value is not the television sitting at the end of the
assembly line, which might be located in Tierra del Fuego.  In order to
realize the surplus value, the capitalist(s) have to actually sell an actual
television set to a purchaser in the way in which it is SOCIALLY NECESSARY
to sell a television set, that is, in a store, in a definite location, after
having transported it there.

Reconceptualizing "circulation" as part of the production process is, I
grant, not a trivial revision, and my mind is not entirely closed on the
subject.  But turning from modern day production to the 17th century for a
moment, I want to do a thought experiment.

Case A
A capitalist in Amsterdam has discovered how to produce a new type of
insulated cloth which will make excellent coats for the northern European
climate.  In order to do this, he has to buy ordinary woolen cloth and hire
100 laborers to work on this cloth and process it for a year in a factory.
There is a two-tier wage structure, and 50 of the laborers will be paid much
more than the other 50.  At the end of the year, this cloth has been
transformed into a surprisingly large amount of insulated cloth, ready to be
made into coats.

Clearly this is a case of capitalist enterprise, surplus value is being
extracted, and so on.

Case B
A capitalist in Amsterdam has discovered how to obtain materials which will
make excellent coats for the northern European climate.  In order to do
this, he has to buy ordinary woolen cloth and hire 50 laborers.  These
laborers, or sailors, take the cloth and climb onto a ship and sail to Fort
Orange on the Hudson River (the present site of Albany, New York).  There,
carrying guns, they get off the ship and give the cloth to 50 people of the
Mohawk nation, who have spent the last few months trapping beaver, mink, and
other fur-bearing animals.  The Mohawks give the pelts to the sailors, who
climb back onto the ship and return to Amsterdam, arriving back at their
starting point after a year of absence with a surprisingly large number of
pelts, ready to be made into coats.

If I have read the Brenner debate correctly, I suspect that some people
would argue that case B is NOT capitalist enterprise, but "mere" trade.
However, I don't see a distinction.  Sailing a ship is complex collective
activity.  Trapping beaver is skilled labor.  Are there any real differences
between the two cases which would justify us in saying that in case A, you
have a capitalist extracting surplus value, and that in case B, you do not?

Lou Paulsen

More information about the Marxism mailing list