Re: Productive and Unproductive Labour

Paul Cockshott (wpc@CS.STRATH.AC.UK)
Tue, 27 Jan 1998 09:58:08 +0000

C. J. Arthur wrote:
> The prior question is what do we want the distinction for! What problem is
> it supposed to address?
> In Smith the problem was the wealth *of the nation*. He took services to be
> evanescent so even if service industries develop it could not add to the
> wealth of the nation only move it around and amounted to social prodigality
> as wasteful as he deemed the individual employment of servants to be.
> Commodities in his definition could be sold abroad and therefore add to our
> wealth. This criterion is used by Paul when he wrote
> >In country A 5% of national income is
> > > spent on advertising. In country B, 1% of national income is spent
> > > on advertising. Each country has the same labour force, and the
> > > same initial technology available to it. Because country B saves
> > > 4% of its income that country A spent on advertising, that value
> > > is available for capital accumulation. Thus in country B capital
> > > will accumulate faster than in country A, *its technology will advance
> > > faster and its terms of trade with country A will improve.*
> But what if there is a world market in advertising services? Would not the
> expertise and resouces of country A lead to its grabbing a big market share
> and hence improve ints terms of trade with B?

This is to put a mercantilist gloss both on Smith and myself. It is
personal servants or advertising are unproductive that they fail to
the terms of trade. It is not their failure to improve the terms of
that makes them unproductive. The terms of trade for a country vary
to the changes in the mean labour time socially necessary to produce
in a given country. As the amount of labour necessary to produce things
that country's terms of trade improve.

The reduction in necessary labour time is the prior condition, change in
of trade the result. For Smith the wealth of a nation was not determined
sale of commodities on the international markets - that would be a
view, but by how much of its wants and necessities it could purchase
with its
'original currency' - labour.

The dissipation of part of the surplus product by an idle and licentious
employing small armies of personal retainers meant that these people
were not
employed building canals, roads or steam engines. If the surplus product
consumed unproductively, as had been the case under pre-capitalist
formations, then the productivity of labour improves at a snails pace
century to century. If instead, it is reinvested in capital goods, then
productivity of labour, and thus national wealth grows in geometric

Similarly with advertising. I gave the example of two countries engaged
trade as a way of illustrating the effect of increases in productivity
arising from the accumulation of capital. If instead we assume we have
same two countries, but that they do not engage in any significant trade
each other. Country B will still experience the more rapid rise in
productivity. This means that if real wages do not rise, there will be
an increase in the mass of relative surplus value to the capitalists of
country B that is not available to those of country A. So even from the
narrow viewpoint of the capitalist class, expenditure on advertising is
a deduction from their future capacity to earn surplus value, and
is thus in the long term unproductive.

Chris complicates the argument by saying what if advertising services

Well in my example, there would be little opportunity for country A
to export advertising services as country B made little use of them. But
in general if an unproductive service is exported, this merely serves
to perpetuate at a national level the illusions of competition. Exports
of advertising or of 'financial services' by the City of London, may
make these appear to be productive from the standpoint of the UK
accounts, but this merely hides their unproductive character at the
level of the world economy.

If we fail to expose this, we descend to the level of acting as
for decadent and unproductive anglo-saxon rentier capitalism.