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

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue Oct 04 2005 - 05:19:03 EDT

Diego Guerrero wrote:
> Paul, you say: "The mass of surplus value can not
>> be altered by activities in the 3rd sector producting luxuries etc."
> Suppose a system producing 10 iron, 10 corn and 100 luxuries, with 10, 10
> and 100 workers respectively. As distribution can be any distribution, this
> would be possible. Do you mean that wages and profits in this third sector
> come from the two former? I don't think so. Another, very different thing,
> would be if this third sector were public administration. Then productivity
> in the two productive sectors would have to be much higher that in the
> other
> sector in order for them to be able to pay taxes and redistribute such a
> quantity of surplus value.
> In my opinion, in the first case we have new areas for accumulation of
> capital and production of new surplus value. In the second case we would
> have new areas outside value production that would reduce the potential of
> accumulation of capital.
> Diego
What I mean is that the third sector

1. Can not produce relative surplus value
2. Can produce some absolute surplus value but, and this is crucial
3. This absolute surplus value can not be accumulated

1. The luxury sector can not produce relative surplus value
    since to produce relative surplus value its output would
    have to enter directly or indirectly into the real wage.

2. It could produce absolute surplus value, so its employees
    can be exploited by being forced to work beyond the time
    necessary to reproduce the value of their wages, but in
    this they are no different from butlers and the other feudal
    retainers that Smith stigmatised as unproductive. These too
    may have to work long hours.

3. Why can the surplus value produced in this sector not be

    Because of its material form.

    Assume depts I, and II remain unchanged, but that working hours
    increase in dept III. This increase in working hours will result
    in a more valuable product in dept III, but this surplus comes
    in the material form of luxuries and services which can not be
    accumulated as constant capital. Its output must thus be unproductively
    consumed by the capitalist class.

Thus the third sector is not what you describe as "new areas for accumulation of
capital and production of new surplus value".

It is what it always was, a drain on the process of accumulation and
thus on capitalist economic progress. This is the reason why Smith
insists on productive labour producing vendible commodities that
persist through time.

This is the same reason why the production of weapons is unproductive,
whether this takes place in state factories or private factories.
Workers engaged in the production of nuclear missiles are
producing means of *destruction* not means of *production* and
as such can not contribute directly or indirectly to the
accumulation of the means of production.

If we loose sight of the underlying material relationships of
production and focus only on legal superficialities we get led
astray by the 'illusions of competition'.

Given your figures for labour inputs we have

Let us now look at your example

       labour  wages   constant   gross value
                       capital    output
I     10      1        10         20
II    10      1        2          12
III  100      10       8          108

Sales by dept I
     10 within the department
     2  to dept II
     8  to dept III

Sales by dept II
     1 to workers in dept I, 1 to workers in dept II, 10 to workers in dept III

Sales by dept III
     9 to capitalists in dept I
     9 to capitalist in dept II
     90 consumed by themselves

Now suppose that hours of work in III are raised 10%, we get
       labour  wages   constant   gross value
                       capital    output
I     10      1        10         20
II    10      1        2          12
III  110      10       8          118

Sales by dept I - unchanged

Sales by dept II - unchanged

Sales by dept III
     9 to capitalists in dept I
     9 to capitalist in dept II
     100 consumed by themselves

So the net effect can only be to increase the personal consumption of
one section of the capitalist class - that section whose workers make
luxuries. The effect therefore is identical to what would have
occurred if they made their personal servants work longer hours.

Paul Cockshott
Dept Computing Science
University of Glasgow

0141 330 3125

This archive was generated by hypermail 2.1.5 : Fri Oct 07 2005 - 00:00:01 EDT