[OPE] Studying unproductive labor: CEPR report

From: Jurriaan Bendien (adsl675281@tiscali.nl)
Date: Sun Mar 02 2008 - 07:10:42 EST


All labour is productive in some sense or other, the double ambiguity is (1) for whom it is productive, (2) what is a cost to someone or from some point of view is a source of income to others. What Marx was concerned with is what is productive for Capital, the argument being that over time the division of labour is altered in favour of capitalistically productive labour, i.e. the division of labour will evolve in a specific way in the longer term, to increase capitalistically productive labour. That is an empirical hypothesis you can test.

Where you see an anachronism, I see a contradiction, namely what is a cost to one group of employers is a source of income for another group of employers, and therefore what labour is economically "productive" is a perpetually contested terrain so long as there is intercapitalist competition. In general, you can say that for Marx labour is capitalistically productive insofar as it makes a net addition to the total mass of surplus value (surplus labour) which can be appropriated by capitalists in an accounting interval. 

Marx however wasn't concerned with what is productive labour in society as whole, but what is productive labour from the standpoint of the capitalist mode of production. This has nothing directly to do with the type of output which the labour produces, but only with property relationships enabling capitalists to capture the countervalue of surplus labour. It is just that with regard to particular outputs it is contingently or in principle impossible to extract profit from them, because of the nature of those outputs in a given setting.

The Swedish government sector is often mystified by the European Left and by American liberals, who try to prove an example of a successful state-organized society. In 2005/2006, out of a total comprising about 245 legally distinct enterprises, the Swedish central government wholly owned 40 and partly owned 14 limited companies managed by government agencies, and 4 of these companies were listed on the stock exchange. In 2005, these companies had a turnover of about SEK 311 billion, and 118,000 employees. 

But the total number of central government employees in Sweden is about 230,000 (the total employed persons in Sweden = about 4.3 million, of which 1.3 million (31%) public employees at the central, regional and local level). So in reality, half of Swedish central government employees work for state-owned companies operating on a profit basis, it's a kind of state capitalism in which the distinction between the public sector and the private sector is not clearcut. 

The general tendency in Sweden is for more and more state companies to be privatized, or for state services to be contracted out to private companies. Another aspect is, that Swedish local government levies income taxes, and also operates services on a cost-plus basis. Since about 1990, competitive "contracting-out" by local and regional authorities rapidly increased, for example the amount of welfare services contracted out to private companies must have increased by at least 400%.

The total "labour value" of a commodity in Marx's sense is not simply the labour-cost of the basic sector, but the total labour cost of physical transformation implied in the commodity at the point of sale to the final consumer. The commodity has a different value at different points in the value-chain. Insofar as physical transformation, preservation or transport occurs in wholesaling and retailing, that cost is also part of the regulating labour-value. Commodities may be sold and resold several times before reaching the final consumer, during which time additional value may be added to them by living labour quite apart from circulation costs.

In national accounts, the value of gross output (the value of production, or the total turnover) is usually about double the value of GDP (net output) because it includes intermediate consumption, and also net output is valued at producer's output prices. The reconciliation of total output value, total expenditure and total income in the product account is achieved by means of an accounting operation, the concepts of which entail that they must be equal, by definition. But that does not mean that they are equal in reality. That should be obvious if e.g. you compare total income receipts to factor costs.

The accounting system is based on the double-entry principle that for every cost there is a revenue, and for every sale there is a purchase. But if the account balances, that is only because certain flows are selected out of the total circuit of transactions that exists in reality, so that they do balance. This means that already at the base level, the social account diverges from the actual enterprise accounts, in particular because the social account includes only those flows thought to be directly related to production.


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