Fwdd from Jurriaan (vexed issue)

Julio Huato juliohuato at hotmail.com
Fri Jun 22 08:28:56 MDT 2001

Hi Julio,

Time does not permit to delve into the issue much at the moment. However a
few comments. There is no "neutral" view of productive labour because it all
depends on your position in the division of labour or on your social
outlook. Marx tries to look at it from the point of view of the capitalist
system as a whole, in the way it organises the material production process,
in that sense he tries to be objective.

He makes or implies distinctions between:

- Commodity production and non-commodity production
- The capitalist sector and the non-capitalist sector
- Commodity production and circulation of commodities ("change of social
- Material goods and "non-material" goods (such as when production &
consumption coincide)
- Production of goods and production of services

But like I said he never resolves the problem adequately, and he doesn't
discuss the fact that in a given social formation, a given society, there
may be other modes of production than capitalist as well. This is not a
problem at the level of theory, but a problem if as a social accountant you
want to estimate the value of the social product. (Normally for instance SNA
operating surplus will contain gross profits by self-employed proprietors,
household income is included, and so on). It is in the attempt to measure
the theoretical concepts that we clarify what is really meant by them, that
is why it's a useful exercise even if we cannot measure the concepts

I think what Marx wanted to say is that, macro-economically, productive
labour makes net additions to material wealth (as you would say, adds to the
stock of material use-values) as well as generating surplus-value, in which
case there would some kind of "mesh" between the mass of surplus value and
the total material surplus product - the value product (v+s) would mesh with
the net new material product (in fact in the former USSR they actually
developed "material product" accounts). But you can maintain that idea only
at a high level of abstraction, in practice the valuation of the surplus
product is much more complex. In reality the relationship between the
monetary surplus-value and the material surplus product may be  distorted by
all sorts of factors, including foreign trade, unequal exchange, profit upon
alienation etc.

Shaikh argues basically as follows. A manufacturer borrows capital from a
bank, produces a product and pays interest to the bank out of his gross
income. The interest (to be precise, the net interest receipts of the bank)
is treated as part of the value of the product, part of its cost-structure
if you like. With its net interest receipts, the bank pays its employees,
treated as unproductive workers. These workers perform surplus-labour and
are exploited, but generate no net additions to surplus-value with their own
labour, rather that labour transfers a part of the current flow of
manufacturers' surplus-value to the bank owner. Therefore he says the wages
of those unproductive workers are really a component of the new
surplus-value generated by the manufacturer.

But this is rather strange, leaving aside problems of the timing of the
transactions, because the wages of unproductive workers are simultaneously
treated as part of surplus-value and as a "deduction" from that
surplus-value. Shaikh would say, yes, but I am looking at it from a
macro-economic point of view, as a process, and the social product that has
value in the Marxian sense, the social product I am valuing, is a "material"
product, a collection of material use-values. The labour of the productive
workers thus sustains not only those workers but also the other workers in a
material sense (and perhaps the non-working population as well).

I on the other hand find this procedure a bit dubious, that is all,
particularly when he includes such labour as  teachers and educational
administrators as productive labour as well. I am suggesting that if
following Marx gross output is defined as c+v+s, the wages of the
unproductive workers must really be considered a component of "c", i.e. a
component of the circulating constant capital. If so, then the aggregate
surplus value is smaller than Shaikh's, and the aggregate rate of
surplus-value is lower than Shaikh's.

Lastly, Leftists often say that GDP doesn't really measure economic activity
properly, but this doesn't really wash. The issue is not so much the measure
itself, but the abuse of the measure by using it for things that it isn't
intended for, misrepresenting the situation. The GDP measure has the great
advantage of including almost any activity that generates an income, almost
any activity that generates an income is treated as "production". The
challenge is really to analyse the components of GDP, so you can see what is
growing and what isn't.

A Marxist would of course exclude the "imputed rental value of
owner-occupied housing" from GDP on the grounds that it is not production at
all. He would query the treatment of bank and financial institutions' income
in the accounts as well. And he would generally treat the distinction
between new and conserved value in a different way. He would say that real
indicators of economic growth in a capitalist society are the net output of
the private productive sector, net fixed capital investment in the private
productive sector, and more subtle, sensitive measures such as the rate of
reinvestment of surplus-value (e.g. gross fixed capital formation at time t
as a fraction of surplus-value at time t-1).

It is not possible to measure the value of the environment ('externalities')
and incorporate it in GDP, because, apart from violating the concept of GDP,
it would mean you would have to treat the environment as a commodity and
impute a market value to it. This is simply not feasible. All you can really
estimate is the value of land improvements and "strategic stocks" of
particular natural resources, but the latter measures aren't very reliable
and subject to change, as the market for them changes.

(I'm still not subbed)


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