the vexed issue (Jurriaan)

Julio Huato juliohuato at
Fri Jun 8 14:06:44 MDT 2001

Jurriaan's posting is very interesting.  I'll comment on a few items.

>So then it doesn't matter what the activity is, as long as it produces
>surplus-value for an employer then it's productive labour.
>Macro-economically we might then say that labour is productive, if it adds
>to the total mass of surplus-value. From this then follows straightaway the
>"law of motion" that capitalist development will, ceteris paribus,  convert
>more and more labour into productive labour over time. In other words, the
>overall division of labour will gradually change so that the proportion of
>productive labour is increased at the expense of other sorts of labour.

Surplus value is value.  It seems clear to me that a premise for the
existence of values has to be that they are use values in the first place.
So, IMO, the definition of productive labor, also under capitalism (not just
in general), hinges on the definition of use values.

If we assume that the production of use values takes place under capitalist
relations, then the production of all use values is 'productive' from the
point of view of capitalism.  Now, these definitions don't make it any
easier to measure these categories statistically.  But that's an entirely
different problem.

I insist on not restricting the definition of use values to tangible
objects.  It doesn't make sense.  And the consequence would be to leave out
ideas, knowledge, information, data, etc. are left out.  If Marx held this
view, then Marx doesn't make sense to me.  However fragmentary his notes
are, IMO, Marx doesn't hold this view.

Now, I don't mean to say that ideas are always and everywhere use values.
I'm talking about ideas that are used as ingredients (means of production)
in production processes where the output enhances human lives and
opportunities and the process does not contribute directly to the 'change of
forms' or to political control.

>A similar argument is made by Paul Cockshott about the arms industry: he
>argues the surplus-value obtained there, is a transfer payment from the
>productive sector. But, you might argue, bullets and missiles are
>commodities like any other, so why isn't the labour producing them
>productive ? He argues, because these commodities do not enter into the
>process of economic reproduction. It seems more like hot air to me but OK
>that is what he argues.

In the real world, the distinction here is not clear-cut.  There's room for
legitimate disagreement.  I see it this way.  If steel is being used to
produce planes, then that seems like direct production of use values.  The
planes may then be used for military purposes, which is in my view
tantamount to wasting or consuming them.  But if, say, it's clear that the
planes are to be used for military purposes, then building them is social
consumption (of the worst kind).  It's like destroying steel.  We need to
distinguish whether the connection is 'direct' (and we need to decide what
we mean by this).  I'd say that, if it's clear in advance that the
production of planes is immediately the production of warplanes, then the
production of planes is not production of use values, it's wasteful social
consumption.  Bullets and missiles seem, for the most part, to be wasteful
social consumption.  We may say that the production of bullets and missiles
is production of use values and the use of bullets and missiles for
political control is wasteful social consumption, but that's just splitting
hairs.  The production of metal for bullet or missile production may be
another matter since the connection is less 'direct'.

>  Logically the implication of Marx's transfer idea that the wage bill of
>non-productive labour cannot be a component of variable capital, because it
>adds no new value to the social product, even though it is part of its
>cost-structure. What is the source of this wage income then ? Marx himself
>does not solve this problem. One school of Marxists (e.g. Moseley, Shaikh)
>says it represents a deduction from the current flow of surplus-value.
>Another school (e.g. Murray) says this cannot be true, because this would
>mean these workers directly appropriate surplus-value, i.e. they are really
>capitalists; also perhaps because capital must be laid out on wages for
>unproductive labour BEFORE a fraction of surplus-value can be claimed, or
>perhaps because this capital really should be seen as a component of
>circulating constant capital (Mandel resolves the issue by saying
>unproductive labour is paid out of "social capital", presumably a fund of
>circulating constant capital which already exists). Again, this problem is
>not so important if unproductive labour represents 5 percent of total
>labour, it is a different story if it is 50 percent or more.

I favor Shaikh's interpretation.  IMO, the argument that people who end up
with a piece of the surplus value is a capitalist is weak.  Capitalists hold
wealth and mobilize it as capital.  The source of wages of workers in the
non-productive sector (as a rule) is not the wealth they hold because they
don't own significant wealth.  Workers in the non-productive sector perform
socially necessary activities.  I wouldn't venture more into the little guts
of this discussion.  The areas of agreement seem broad and sound enough.

>But leaving this aside, another problem is the definition of "commodity"
>itself. It is through the production of commodities that surplus-value is
>created, so then we need to be able to specify what a commodity is and what
>commodity production is. For instance, if I buy a tourist package or a
>financial package, is that a commodity ? Are services (where production and
>consumption coincide) commodities ? Is information a commodity, and under
>what circumstances ? Some of this is discussed on the OPE-L list.
>A commodity, says Marx, has both a use-value and an exchange-value. Marx
>explicitly defines the use-value of a commodity in terms of the physical
>attributes of a tradeable object which is capable of satisfying human needs
>or wants. He wants to say this object is not an object in thought, but in
>tangible material reality. If we were to say that a use-value is the
>"useful effect" of a tradeable object, then it would seem that at some
>point we must leave the materialist terrain and enter the terrain of
>subjective (marginal utility) theory. Because whether or not a commodity
>has a "useful effect" can be a purely subjective matter.

It doesn't follow. Use value is a 'natural' property of things, not in the
sense of its physicality, but in the sense of humans having needs regardless
of the type of society they live in.  The need to distribute social labor
among the different industrial branches, Marx says, is a 'natural' law (some
letter to Kugelmann).  This doesn't mean it is nature-given.  It means that
as far as humans live, they need to do this, whether through markets
(economically) or otherwise.

It's the function of things with respect to human needs that turns physical
objects into use values.  Of course that's because humans are in a sense
physical entities and the physicality of things is associated with their
ability to exercise a physical influence on physical humans beings and,
thereby, satisfying their needs.  This holds whether the needs arise from
'the stomach or the imagination'.  But, again, the FUNCTION it performs
fitting the human need is what makes the use value what it is.  The
materiality is, if you allow me, a vehicle for the function to be carried
out.  This is consistent with materialism.  A useful effect is objective in
this sense.  [You may want to take a look at a recent exchange with Jay in
this list on the issue of 'social objectivity' (under the thread "Race").]

Now, let me consider a 'tourist package'.  Say, it consists of round trip,
hotel, and meals.  Meals pose no problem.  Restaurant 'service' may.  That's
the case where production of the useful effect coincides with its
consumption.  Also, hotel 'service'.  Now, are they physical?  Yes, they
are.  Physical reality is changed as a result.  The product is produced and
consumed, physically speaking.  The tricky part is that we're used to
expecting a separate tangible object.  Well, the transportation example used
by Marx is clearly consistent with the useful effect approach.
Transportation is a physical product, a useful effect, a use value, and a
commodity (under certain social conditions). Physically, an orange in
Veracruz is different from the 'same' orange in Mexico City.  A raw material
(orange in Veracruz) was translated, displaced (therefore, physically
altered) by taking it to Mexico City.  It is now a product, not only of the
farming process, but also of the transportation process (which has added a
physical, spatial property to the orange that it lacked before).

Finally, the 'financial package'.  Say, it consists of brokerage services.
You'll be able to buy financial assets (say, turn cash into stocks and
bonds) and they will assist you by brokering the deal and charge you a
commission or fee.  That's social consumption.  It's the 'change of forms'
which is involved here.  No useful effect as far as I can tell.  Add
'financial advice' to the package and it doesn't make a difference as far as
generating wealth.  Still, this is in the business of changing the forms

>Can information be a commodity ? Of course, provided it is in a form
>exchange).  As soon as somebody "lets out the secret" as it were, the
>information ceases to be monopolised, it ceases of be the private property
>of an owner, and what is worse it may lose its use-value altogether.

This is very interesting.  But, IMO, the problem here is only a problem to
Marxist theory because no Marxist has dealt seriously with this question (as
far as I know).  Mostly, it's A PROBLEM FOR THE CAPITALIST MODE OF
PRODUCTION (forgive my capitals).  The issue here is what conventional
economics calls the 'public good' dilemma.  If information is not
'excludable' and 'exhaustible', then it becomes a 'public good', which leads
to a market failure (private ownership rights cannot be well defined).
Public ownership is the ONLY and ultimate way around it.  But then orthodox
economics (the Hayekian-Friedmanian wing) alludes to the principal/agency
problem involved in public ownership and what not.

IMO, with due caution, Marxists would benefit from taking up the
conventional literature, getting a good hold of the issues involved, and
framing them in the right theoretical structure, criticizing or negating in
the dialectical sense.  They need to straighten these things out.  The
issues revolving around 'welfare economics', Coasian 'transaction costs',
'Coase Theorem', 'theory of the firm', etc. are very important in grasping
the intricacies of the process Marx called 'socialization of production' in
the current conditions.  Other materials worth exploring are the works by
Ken Arrow, Amartya Sen (Resources, Values, and Development), and Paul Romer
(his articles on endogenous growth models).

Market failures is a topic where orthodox economics ADMITS openly that the
character of capitalist ownership is unable to allocate resources
efficiently.  Again, the Hayekian-Friedmanian argument against public
ownership is negative ("it's worse than private ownership because of
principal/agency inefficiency waste, rent seeking, deadweight losses,
corruption, and crap").  The fact is that, as they admit, market failures
break their general equilibrium toy beyond repair.

We talk in general about 'socialization of production' (as opposed to the
private character of appropriation) as the increase in the interdependence
among people resulting from the progress of productive forces.
Traditionally, the Marxist literature has implied this is related to a
tendency towards larger scale production.  I'm not sure the growth of the
productive forces necessarily requires increasing scale.  Things are
obviously more complicated than this.  The point is that 'market failures'
point to specific areas of social production where communist social
relations may be increasingly called for if the productive forces are to
keep growing there.  We don't have to believe in the cheap sloganeery of the
managerial literature to perceive that they are running into trouble in
'high tech' production.  Why do they increasingly need 'democracy' in the
workplace, assemblies of workers to discuss everything (except, of course,
'compensation packages', hiring, and firing)?  Why the boom in the
literature in principal/agency and the sophisticated formulas in profit
sharing, backloading of benefits, etc.?  It seems to me that they want
communism without giving up private ownership.  That looks like a big
central contradiction to me.

If it can be established logically that productivity growth is increasingly
linked to the emergence of 'public goods', 'natural monopolies', and
'external' costs/benefits that cannot be internalized but by 'merging'
(i.e., increasing cooperative or public ownership), and that 'rent seeking'
and the principal/agency problem related to public ownership can be
asymptotically eliminated by means of a decrease in social inequality,
greater uniformity in education, popular involvement in political matters,
democracy of the direct producers, etc., then a lot of the academic and
practical appeal of orthodox economics would dissipate.

That would be giving them, as they say in Mexico, "a soup of their own
chocolate."  Now, if I understand what you're getting into, I applaud it.
Indeed, the 'information economy' (a term I won't like until I grasp what it
involves and once it's properly framed in the theory) is full of potential
in this respect.  Nobody should infer from this that communism will result
automatically or smoothly from the gradual blind demands of productivity.
Humans have to build communism and the ride will be wild.

Anyway, I'm babbling here, but that's why I urge Marxists in the rich
countries to look into this more closely.  Your posting excites me because
it tells me that perceptive people are looking into this from a Marxist or
socialist perspective.

The rest of your posting is also very interesting.  I appreciate your
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