[OPE-L:5691] productive and unproductive labor

Fred B. Moseley (fmoseley@mtholyoke.edu)
Fri, 7 Nov 1997 15:59:17 -0500 (EST)

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This is a continuation of my discussion with Mike W. on
productive and unproductive labor.

1. In his latest post, Mike seems to agree that Marx
assumed that exchange is the exchange of equivalents
and thus that no surplus-value is created in exchange. It
seems to me that it follows of necessity from the
exchange of equivalents that the labor required to carry
out the acts of exchange do not produce surplus-value
and hence is unproductive labor. Mike says that this
"reads too much" into the exchange of equivalents. But I
do not see how it could be otherwise. If no surplus-value
is created in the activities of exchange, then how can the
labor required for exchange produce surplus-value?

2. Mike seems to suggest that because circulation labor is
necessary in capitalism, then it must produce value and
surplus-value. But this does not follow, at least not
according to Marx's theory. Circulation labor is obviously
necessary in capitalism, but Marx assumed that this labor
nonetheless does not produce value and surplus-value,
because its necessary function involves the exchange of
equivalent values, or the change of form of equivalent,
predetermined values. It is necessary for the
transformation of values, but it does not produce value,
according to Marx's theory.

3. Mike mentions transportation labor several times and
lumps this together with circulation labor. But for Marx,
transportation labor is still within the sphere of
production and is productive labor (C.II. Ch. 6, Sec. 3).
Transportation labor does involve a change of form of
value from commodities to money or vice versa, which is
the function of circulation labor.

4. I argued in my last post that if Marx's distinction
between productive and unproductive labor is not taken
into account, then it appears that the "rate of surplus-
value" in the US has been falling and is now only about
0.2, contrary to Marx's expectation. On the other hand, if
Marx¹s distinction is taken into account, then the rate of
surplus-value has been rising and is now about 2.3,
consistent with Marx's expectation. Mike replied that "a
particular conceptualization that leads to predictions in
keeping with our priors is not per se a point in its favor."

My original point was simply that whether or not one
takes this distinction into account makes a huge
difference in how we view the "rate of exploitation" in
contemporary capitalism - in response to Mike's earlier
question "does it make a difference in our quantitative

I was also arguing that if one wants to empirically test
one of Marx's conclusions or predictions (such as a rising
rate of surplus-value), then one should attempt as much
as possible to estimate the variables in his theory as
Marx himself defined them, because it is in these terms
that the conclusions are derived. It is not appropriate to
change the definitions in his theory and then to conclude
that "his" theory is contradicted by the evidence, as
Weisskopf and others have done.

I would add that the point here is not that a particular
conceptualization leads to certain predictions that are
consistent with *our priors*, but rather that the
predictions are consistent with *the historical evidence*.
I think this is indeed a point in favor of this particular

5. I also argued in my last post that further empirical
evidence in favor of Marx's distinction between
productive and unproductive labor is that this distinction
provides a superior explanation of the decline in the
conventional rate of profit in the postwar US economy,
superior especially in relation to the main competing
theory, the "profit squeeze" theory. The "rising
unproductive labor" theory is able to explain, not only
why the rate of profit decline, but also why the recovery
of the rate of profit has been so slow. The "profit
squeeze" theory is not able to explain why the recovery
of the profit rate has been so slow.

Mike responded that "it is conceptually more coherent to
hierarchically synthesize the various different
determinants of the falling rate of profit, rather than try
to empirically select out a single determinant."

My response is that Mike may want to theoretically
synthesize the different causes of the rate of profit and
show that they are not mutually exclusive, but different
manifestations of the same fundamental dynamic
(overaccumulation). But in the analysis of any given
historical period, it is not enough to say that all these
causes *may* be operating. We want to know (or at least
I do) which one or more of these causes was (were)
operating during this period and their relative
significance. The actual cause(s) implies which
"adjustments" must be made in order to restore the rate
of profit. To determine which causes were actually
operating, we need empirical analysis, not just a
theoretical synthesis.

Furthermore, the theoretical synthesis in Mike's (and
Geert's ) book is a synthesis between the profit squeeze
theory, underconsumption theory, and the rising
composition of capital theory. But in the case of
unproductive labor, Mike seems to be arguing that
increasing unproductive labor could not have been a
cause of the decline in the rate of profit, because there is
no such thing as unproductive labor. So a theoretical
synthesis of different causes is not possible in this case.
Instead, we need some kind of empirical test to evaluate
whether or not rising unproductive labor could have been
a cause of the decline of the rate of profit. I have argued
that the empirical evidence suggests that is was.

I look forward to further discussion.


P.S. I appreciate Paul C.'s "100% agreement" with my
prior post.