[Marxism] James Heartfield responds
johnaimani at earthlink.net
Tue Dec 9 16:47:33 MST 2008
<<Rather than constant capital crowding out variable capital, as Marx
predicted, non-productive, and less-productive service sector, finance
and government job growth has crowded out productive growth in industry.
All of this of course is confirmed by Shaikh, who deduces his rising
organic composition of capital on an ever-smaller subsection of the US
economy, (manufacturing, narrowly defined as the only productive
labour), losing sight thereby of the overall decline in the organic
composition of capital, as more and more workers are in low productivity
service sector jobs. >>
The influence of the costs of non-productive labor (call it 'not v' or ~v) on profit rates
has been cited by Fred Mosely in, amongst other papers,"The Decline in the
Rate of Profit in the Postwar US Economy: A Comment on Brenner."
"The main underlying cause of this limited increase in the rate of profit is
the same as the main cause of the previous decline in the rate of profit: a
continued increase in the costs of unproductive labour. According to my
estimates, the ratio UF ('un-productive labor) increased 55% over this
recent period (from 0.98 in 1977 to 1.46 in 1994)."
Now, when we examine the production process this 'unproductive labor's
contribution to value creation is more akin to that of constant capital (c), i.e.
it contributes its own value and no more. This is altogether totally unlike the
contribution of 'productive' laborers (v) whose labor contributes not only
its own value but also the value of the surplus-product (s) it produces.
Thus profit (this s mediated by the market-forces) must be calculated by
its ratio to not only the classical (c + v) or,
c + v
but this 'non-productive' labor (~v) must also be factored in as a cost of production.
And considering its inability to add value (again, a la 'c'), in view of this fact,
a proper accounting, as far as value-creation ability, would categorize this '~v'
alongside constant capital, or
(c + ~v) + v
The purpose of the exercise above is to demonstrate that labor's ability to create
value supports not only a growing (and accumulated) constant capital but also
its opposite, a growing mass of ancillary (and sometimes parasitic (i.e. policemen,
etc, stock-brokers, etc, etc.)) non-value-producing waged-workers.
Moseley is quite correct to note the effects of '~v' on the tendency of profit rates '
to decline. Moseley, however, would be the first to tell that this is altogether
in keeping with the spirit and the letter of Marx' economics.
Date: Tue, 09 Dec 2008 08:53:47 -0500
From: Louis Proyect <lnp3 at panix.com>
Subject: [Marxism] James Heartfield responds
To: Activists and scholars in Marxist tradition
<marxism at lists.econ.utah.edu>
Message-ID: <493E786B.2090605 at panix.com>
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Do thank your listers for their comments on my article in Platypus.
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