Re: Quantifying Value (3): Juriaan's first query

Murray Smith (
Fri, 16 Jan 1998 11:23:35 -0500 (EST)

On Fri, 16 Jan 1998, Alan Freeman wrote:

> Juriaan writes
> > I have never been able to find any passage in Marx which states that
> > unproductive wage costs are paid out of the surplus-value produced by
> > productive labour, in the same production period. I would welcome any
> > reference. To me it seems incoherent to suggest that any wage labour is
> > paid out of surplus-value. .
> I always worked from this:
> "This also establishes absolutely what *unproductive labour* is. It is
> labour which is not exchanged with capital, but *directly* with revenue,
> that is, with wages or profit (including of course the various categories
> of those who share as co-partners in the capitalist's profit, such as
> interest and rent)"
> This is From Theories of Surplus Value Part I, p157 (the discussion on Adam
> Smith). Seems pretty categorical to me. It is preceded by the following
> remark
> "Productive labour is here defined from the standpoint of capitalist
> production, and Adam Smith here got to the very heart of the matter, hit
> the nail on the head. This is one of his greatest scientific merits (as
> Malthus rightly observed, this criticcal difference between productive and
> unproductive labour remains the basis of all bourgeois political economy"
> I think that the Theories of Surplus Value material on productive and
> unproductive labour is much easier to follow because in it, Marx is
> developing his critique of existing thinkers. Therefore he clearly
> specifies what he thinks is to be avoided, as well as what is to be done.
> Also I think the whole thing is just much more rounded.
> It is also I think clear from TSV that Marx seems to have conceived of the
> issue under two distinct headings.
> In the early part of Part I he is concerned to sublate Smith's category of
> producing 'vendible objects' as the basis of productive labour, and insist
> that service labour is also productive. That is, he is concerned to say it
> is not the *category* or *type of activity* of the labour that matters, but
> whether it is employed by capital, whether it is hired for the purpose of
> creating value for a capitalist, which the capitalist will realise by
> selling on the results of her or his labours to a third person. As I put
> it, the labourer is producing *commodities* (whether services or vendible
> objects). [Incidentally, what is the physical magnitude of a song?]. At
> this point there is no question that the labourer is engaged in the
> production of a new use-value: the question is, in what social relation is
> this produced?
> In an entirely separate section dealing with finance, circulation, etc, in
> the 'Addenda' at the end of TSV I (slightly out of place) Marx is concerned
> with a distinct question IMO: here he is concerned that financial and
> commercial workers create no new use-value, but merely circulate what
> exists. Insofar as commercial workers modify the use-value, eg by
> transporting goods to another place, he considers them productive. Here it
> appears there is a conflict, since the *category* of labour does appear to
> matter. But a different side of the commodity -- the unity of use and
> exchange value -- is at dispute. Here the labourer is not productive
> because she or he produces no use value (and therefore, clearly, can't
> produce a commodity).
> It all seems quite consistent to me and I sometimes wonder why it causes so
> much difficulty. Productive labour is labour that makes value for the
> capitalists. Value takes the form of commodities. So, if you don't make
> commodities, you ain't productive. What's to worry?


I find most of this entirely unobjectionable. Productive labour is labour
that is directly involved in the production of surplus value through
involvement in the creation of use-values in the commodity form. But in
the passage that Alan cites from TSV Marx seems to be referring to
unproductive labour of a certain type, and this passage by no means
suggests that all unproductive labour is exchanged with revenue. Here is
how I treat the issue and the passage cited by Alan in my article
"Productivity, Valorization and Crisis: Socially Necessary Unproductive
Labor in Contemporary Capitalism" (Science & Society, 57:3):

"Having established what, for Marx, generally constitutes productive
labor, we are now in a position to distinguish between the main forms of u
productive labor. Two principal forms are already indicated: 1) labor that
belongs to non-capitalist socioeconomic activities and therefore cannot
serve to augment social surplus value (the labor of self-employed
commodity producers is a major instance of this form within capitalist
societies); and 2) labor that is in the emply of unproductive capital and
therefore 'facilitates' the valorization process but does not contribute
directly to the augmentation of social surplus value. To these should be
added: 3) labor that is supported by the capitalist state and likewise
contributes 'indirectly' to valiorization and accumulation through its
role in maintaining the institutional framework of capitalist society; and
4) labor in the employ of productive capital that nevertheless contributes
only indirectly to valorization and accumulation (supervisors, security
guards, etc.)

"The last three forms of unproductive labor -- what might be termed
'circulation labor' (form 2) and 'social maintenance labor" (forms 3 and
4) -- have expanded considerably under advanced capitalism, while the
first form has declined precipitously. Yet it was undoubtedly only the
first form that marx had in mind when he enunciated his much-quoted but
quite misleading definition of unproductive labor as 'labor which is not
exchanged with capital, but directly with revenue, that is with wages or
profit' (TSV 1, p. 157, 1978 Progress edition).

"In Capital II and Capital III, Marx unequivocally affirms the existence
of forms of unproductive labor that are not exchanged withe revenue, but
rather with capital. In these later treatments, Marx is preoccupied with
the specifically capitalist incarnations of unproductive labor: the
socially necessary forms of unproductive labor that serve the reproduction
of the capitalist socioeconomic order. To be sure, in Capital II Marx
still refers to unproductive workers 'who receive for their services a
part of the luxury expenditure of the capitalists' and 'who are themselves
to this extent a luxury item' (Vintage edition, 1981, 486). But the main
focus is no longer on 'form 1' unproductive labor of the luxury type.
rather it has shifted to unproductive labor in the sphere of circulation,
and to unproductive labor as a cost of circulation. The activities of
buying , selling and bookkeeping are singled out by Marx as types of
unproductive labor with a very different import than the unproductive
labor of butlers, mails and stable boys:

'...a part of the variable capital must be deployed in
acquiring...labour-powers that function only in circulation. This capital
advance creates neither products nor value. It proportionately reduces the
scale on which capital advanced functions productively. (ibid. 210-211)'

"Clearly, the unproductive labor with which Marx is here concerned i
socially necessary to capital in so far as it contributes not to the
'creation' of surplus value but to its realization in the sphere of
circulation. Moreover, Marx is clear that this form of unproductive labor
is exchanged with capital. Yet Marx also refers to the capital advance
made to acquire these unproductive labour-powers as a 'part of the
variable capital' -- a problematic suggestion in view of his definition of
variable capotal as capital exchanged for labor-power of the productive
type (Marx, Capital I, Vintage edition, 1977, p. 317).

"This apparent contradiction in Marx's thinking on the problem of
circulation labor reflects a contradiction that exists in reality: the
circumstance that labor involved in the circulation of capital is
'productive' from the standpoint of individual (commercial or financial)
capitals, even though it is unproductive from the point of view of the
social capital. What we are dealing with then is a 'variable capital sui
generis': a portion of the social capital exhibiting some but by no means
all of the characteristics associated with variable capital....


"The fact that 'buying and selling agents' in both the sphere of
production and the sphere of circulation perform functions that are
necessary to completing the circuit of capital (through the realization of
commodity values) in no way obviates the cicumstance that the paid labor
of such agents will be viewed differently by industrial and commercial
capitals: the former will see such labor costs as a deduction from its
profits, the latter as a source of profits. Both perspectives embrace a
partial truth. But the real significance of this form of labor from the
standpoint of the social capital as a whole can only be grasped by taking
into consideration its contribution to the overall process of capitalist
production/reproduction. From this standpoint, socially necessary
unproductive labor (SNUL) -- whether of the 'circulation' or 'social
maintenance' types -- has a highly comples relationship to the
valorization and accumulation processes: on the should find a subtle
theoretical reflection at the level of Marx's basic value categories....

"If the costs of circulation are not to be regarded as a part of the
aggregate surplus value, how rthen should they be treated? The most
adequate answer to date has been suggested by Shane Mage: 'What takes
place in the unproductive spheres is simply the outlay of a determined and
necessary constituent part of the total social capital" (Mage thesis,
1963, 65). The inspiration for this is Capital III, where Marx states:
'Althought [circulation capital] forms additional capital, it does not
form any more surplus-value. It must be replaced out of the commodities'
value, for a portion of this value must be reconverted back into these
circulation costs...' (Vintage edition, 1981, 405)

"Since circulation activity can add no new value to the commodity product,
Marx concludes that 'the additional value that [the merchant] adds to the
commodities by his expenses is reducible to the addition of previously
existing values, even though the question still arises here as to how he
maintains and conserves the value of this constant capital' (ibid, p.
406). The relationship of commercial capital to the commodity product is
therefore similar to that of 'means of production' (machines in
particular), which add 'previously existing value' but can confer no new


"What all this implies is that the variable capital sui generis deployed
by unproductive capital is, from the standpoint of the social capital,
qualitatively similar to the constant capital deployed by productive
capital. It is vriable only in its ability to effect a transfer of already
existing surplus value from the productive to the unproductive spheres.
Moreover, whether paid for by commercial or industrial capital, the costs
of circulation form a component of the capital advanced and therefore
reduce the average rate of profit: 'The surplus value s remains constant,
but the capital advanced C still gorws from C to C^, so that the profit
rate s/C is replaced by the smaller profit rate s/(C+C^). The industrial
capitalist therefore attempts to keep these circulation costs to a
minimum, just as he does his outlay on constant capital' (Capital III,
Vintage edition, 1981, p. 413)."

Marx's treatment of unproductive labour costs as a form of constant
capital remained largely implicit in his writings, which is why we have
on-going disputes as to whether they should be treated as elements of
variable capital, constant capital or social surplus value. A definitive
answer to the problem cannot be found in Marx's own words. But I hope to
have shown that the conceptualization of unproductive labor costs as
elements of the "constant capital flow" is in no sense foreign to the
theoretical structure erected by Marx in Capital; indeed, as I argue in
both of my articles, it offers the best solution to the problem on
theoretical, methodological and political grounds.

I look forward to Alan's and others' responses.

Best regards,