Re: [OPE-L] "Levels of abstraction"

From: Dave Zachariah (davez@KTH.SE)
Date: Thu Jan 31 2008 - 05:30:32 EST

Jurriaan, you raise several points. Let's not go too fast ahead.

To begin with the fundamental: The very notion of productive/unproductive
economic activities implies that the former is 'necessary' or 'basic' in
some specific economic sense since a fraction of its surplus support
supports the unproductive ones.

By definition, unproductive activities are a drain on the social surplus
product. An expanding unproductive sector of the economy must be supported
by more surplus labour in the productive sectors. These are all
historically invariant concepts, applicable to any mode of production, not
merely capitalism.

If we only consider capitalistically employed people for a moment, the
same applies. A growing unproductive business reduces the profits left for
reinvestment in the productive firms.

After this assertion one naturally asks: Do such sectors exist?

Adam Smith and Karl Marx both thought so but neither gave a formulation
that was precise enough. However, Smith's observation that "a man grows
rich by employing a multitude of manufacturers but grows poor by employing
a multitude of menial servants", points to something important.

You ask:

"If the soldiers are part of a private army which is a profitmaking
corporation, why aren't they capitalistically productive workers? If the
producers of royal luxuries are hired by a profit making company, why
aren't they productive workers?"

They are surely profitable for the firms that employ them but when one
looks at the economy as a whole things are different. This may not be easy
to see, that is why I suggest we adopt the historical-materialist approach
and look at who produces and appropriates goods and labour *before*
looking at prices and profits.

The tale of the King and his subjects is a simple but good place to start.
It turns out that the soldiers and craftsmen were unproductively employed
by the King, they had to be supported by the surplus labour of the

The same story can be told if we replace the King with the capitalist
class as a collective, the soldiers with private guards, the craftsmen
with workers producing luxury yachts and the peasants with workers who
produce the means of consumption and production.

//Dave Z

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