Re: [OPE-L] basics vs. non-basics and financial services

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Mon Oct 03 2005 - 08:08:22 EDT




Financial services also include transfers of money (and other services),
a special type of transport of things. May be in the future there will
be no money, but I think it will keep being some sort of means of
payment that will need to be "transported" from here to there, etc. Of
course, if we reduce its activity to money I agree with you again. 


Paul Cockshott

I am not sure that the analogy with transport is relevant here.

Banks are involved in record keeping, both to carry out payments

and to levy interest. The activity of record keeping is distinct

from transport, in that transport involves the physical movement

of things from one place to another. The keeping of account records

is something different from transport. Its aim is not to move things

but to maintain and update a relation between  economic subjects

and quantities of a unit of account.


The physical transport of gold coin between the safes of different

money holders is a particular way of maintaining such records, but

has been a totally subsidiary activity since the onset of capitalist

banking in the middle ages. From the early trade fairs of the middle

ages, the settling of accounts by merchant bankers had already

displaced the physical transport of gold for most trading operations.

This enabled transport to be restricted to its proper use - the movement

of goods to where they were of use - and obviated the need to ship

gold about.


Record keeping and economic calculation are activities required in

all civilizations, but financial services are a specifically capitalist

of record keeping and as such are not required in pre or post capitalist

civilizations. Non capitalist societies do not require the transport of

means of payment from place to place.  The Inca for example had

economic calculation but did not ship gold about as a means of 

payment. Instead the record keeping took the form of knots on

string. If Polanyi is to be believed the same applied to early

Summerian civilization, where there was no shipment of coin or

bullion about, but records of the movement of goods and tax liabilities

were maintained in written form on clay.


In all cases such record keeping constitutes what marx called the

unproductive faux frais of the mode of production.


I think that the bank sector's rate of profit is fixed like in other
sectors. Profit here is the difference between the sum of interests
received (due to loans and credits being in the assets of bank assets)
and the interests paid to people and firms, and has to be compared to
total capital of the banks. But what workers in the bank sector do is
the same that workers in the mining sector did (and keep doing) when
producing the gold necessary for money to circulate; of course, you have
to add to those miners people working in making the coins, printing
notes, etc. So it is this why I believe they are productive as far as
they do that.




Paul Cockshott

How do you believe that the rate of profit of the banks is fixed?



This was one of the points I was trying to make. Bank charges could

conceivably be viewed as a payment for the 'commodity' of commercial

record keeping. But the banks own accounts show that the revenues

from this commodity cover only a small part of the costs of the banks.


Let us leave out for the moment whether the work on the 'commodity'

of commercial record keeping is productive and discuss that lower down.


Since bank charges only pay for a part of the work done in banks, the

rest of the work done in the banks is paid for out of interest. Since

interest is a deduction from the surplus value, that value was produced

by the labour of productive workers in the firms to whom the loans

were made. Since their wages are paid from value created elsewhere,

their labour can not be productive of value.


But even that part of the labour costs of a bank that are met out of 

bank charges which are thus a charge for the work of record keeping in

ordinary commercial transactions is not itself productive. Since what

these record keeping activities do is still a matter of regulating the

of different proprietors. As such they are labour expended to maintain

the social hierarchy, and no more productive than the ministry of





It is the same thing that in trade. In supermarkets and malls workers do
not circulate commodities more than in any other sectors. They do
productive labour in transporting, ranging, stocking... commodities.
Commodities are only commodities when the products that they contain are
use values for the buyers as well, and they would be of no value if they
did not be in the shelves waiting for their potential consumers.


I agree that the supermarkets do employ some productive workers - those
involved with the

physical transport of goods. They also employ unproductive workers -
those involved with

the charging for the goods being sold, or those involved with
advertising and promotion.




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