Production circulation and distribution

clyder at clyder at
Wed Sep 24 03:37:41 MDT 2003

Paulsen raised the questions whether work in transportation should count
as value creating. It seems to me that there are 3 distinct issues
raised by his posting.

1. The issue of transport that he raised initially.
2. The issue of transport as a phase in international or inter-
   regional trade - his phoenicians discussion.
3. The more general question as to whether there is an objective
   criterion we can apply to any activity and say yes or no
   this is or is not productive of surplus value.

I say surplus value in my last sentence, whereas the original
question was one of value creation. I do this advisedly since
I think the categorisation by Mandel and others of retailing
as non value creating is closely related to the question of
unproductive labour. Mandel and others categorised retailing
as being unproductive - an activity which consumed surplus
value rather than producing it.

My contention would be that it is only in the context of
this criterion that one can decide on my question 4, a
general method of classifying the productivity of labour.

I would agree with the thrust of the argument in the original
posting that transport counted as productive labour, my
understanding had been that Mandel along with most Marxist
writers on productive and unproductive labour treated transport
as a productive activity. (My memory may play me tricks with
respect to Mandel since it is so long since I read him.)

The discussion of transport of amber by the phoenicians raises
not only transportation in the physical sense, but trade
between economies where the conditions of production differ.
This obviously touches on the Ricardian theory of comparative
advantage. One need not take something like amber which
naturally occurs only in certain places for this to be 
operative, but the amber case establishes the method of
argument. The value of amber in the east mediteranean was
given by the labour of transportation by the merchants
of Tyre plus the labour embodied in the trade goods that
they had to exchange for amber in the Baltic. If they shipped
wine to the Baltic, then the Baltic value of wine was
set by the labour required to produce amber to purchase it.

The case is less obvious where trade occured between two 
countries each of whom could produce either trade good -
say wine and corn between Egypt and Gaul. Here Egypt
specialised in the export of corn because the exchange
value of corn  in terms of wine on the Egyptian market 
was lower than the exchange value of corn in terms of
wine in Gaul. This led to the possibility of profit
if the labour of shipping was low enough.

Here each commodity has a well defined domestic value
in its own market defined by local technical conditions.
The profit of the merchant here is a special form of
relative surplus value due to the merchant introducing
a new method of producing wine to Egypt - shipping corn
to Gaul. Egypt and Gaul obviously did not have capitalist
modes of production at the time, but the nascent capitalism
of trade drew its surplus from a mechanism that is
explicable as one of the 2 forms of surplus value
production given by Marx. Once capitalism is generalised
international shipping trade remains productive of 
relative surplus value.

This brings us to the general issue of classifying any 
activity x as productive of surplus value.  

Divide the economy into 3 departments, I produces means
of production, II produces wage goods, III produces 

The input output system is level_1 feasible if dept I
produces more means of production than it consumes.

The input output system is level_2 feasible if, given
the current real wage, it is possible to operate depts
I & II so that sufficient wage goods are produced to
ensure the survival of the working population.

There exists no equivalent feasibility criterion for
dept III.

Surplus production
Sraffa showed that the maximum rate of profit in an
economy ( as wages tend towards zero ) is given by the
material surplus product rate in dept I, strictly defined
as those industries whose product directly or 
indirectly enters into their own production.
Thus all industries in dept I must be productive
and whe have, from Sraffa, a clear predicate for
inclusion in the set of productive industries.

Sraffa assumes that wages can in principle fall towards
zero. If we drop this assumption for the classical idea
of a minimum feasible real wage, then we have to treat
dept II as part of the basic sector necessary for the
reproduction of the system as a whole. In this case it
can be seen that productivity improvements in dept II
have the effect of increasing the rate of profit.

Note that goods which neither enter into the real
wage not directly and indirectly into the material
production of every other good, will be in dept III.
No improvement in productivity here can increase the
rate of profit. It is clear that classical unproductive
activities like advertising, priestcraft, personal fitness
advisors etc, fall into this category. Less obviously
so does the material production of Lear Jets, F16s
and cash registers.

Productive of Value - a mistaken concept
I am not sure that it is helpful to talk about activities
producing value. Labour does not produce value, it produces
use values, and as the basic social resource, 'is' value.
Thus production of corn absorbs a certain amount of value -
direct and indirect labour. Production of advertising
does the same. To the extent that products are exchanged
as commodities, their price will reflect the value absorbed
in their production - this is as true for advertising as
it is for corn.

It is only by looking at the matrix of material production
as a whole that one can decide the role each activity takes
in the production of the surplus.

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