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

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Thu Oct 06 2005 - 16:26:38 EDT

-----Original Message-----
From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On Behalf Of Rakesh Bhandari
Sent: 06 October 2005 16:47
Subject: Re: [OPE-L] basics vs. non-basics and financial services

At 12:01 PM +0200 10/6/05, Diego Guerrero wrote:
As I have noted, Paul C's attempt to defend a Smith criterion of
productive labor in material terms cannot be squared with his
Keynesian understanding that unproductive labor in those terms can in
fact be productive from the perspective of growth of value and use
value. I don't know whether Paul has conceded this, but my criticism
of his eclectic theory seems unanswered to me. Perhaps I am missing

The point Rakesh is that whilst any sort of activity can stimulate
employment - even Keynes joke about the state burying banknotes in
milkbottles at the bottom of mines and employing people to dig them out
the employment that is stimulated is not necessarily productive.

A stimulation of employment may pull the economy out of recession
and allow the expansion of the basic sector which in turn will allow
the physical surplus of the basic sector to grow, and this, when
expressed in money terms will represent surplus exchange value.
Unproductive employment in the military may stimulate this but
that does not make employment in the military productive.

Smiths concept of productive labour was tied to accumulation. For
him labour is productive if it contributes to accumulation. He gives
two definitions of this:
1. That the labour must be employed out of capital not revenue
2. That it must fix itself in a vendible commodity

I think he was right to give both definitions. The first definition
presents the matter from the standpoint of the individual capitalist,
that he will get poor by employing servants out of revenue but rich
from employing workers out of capital. The second definition applies
from the standpoint of the economy as a whole. The economy as a whole
can only accumulate physical commodities - it can not accumulate
or haircuts. Hence the insistence that accumulation depended on
labour being fixed in vendible commodities. It is presented more as
an intuition than an elaborated argument, but the intuition is sound.

On the issue raised by Jerry of whether Smith was a historical
materialist, my understanding was that Marx and Engels did not
claim to have invented the materialist approach to history. This had
already been put forward by Scottish Enlightenment writers like
Ferguson and Smith and Millar. A good Ricardian economist like Cairnes 
seems to me to be also a historical materialist. His analysis of
the Slave Power, is pretty close to a historical materialist 
conjunctural analysis.

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