Re: [OPE] Services (->Paula)

From: Dave Zachariah <>
Date: Mon Jan 05 2009 - 11:31:03 EST

Jurriaan Bendien wrote:
> Adam Smith and his entourage of Marxist enthusiasts constantly confuse
> the material conditions for the production of output and the social
> conditions for the accumulation of capital, [...] The neo-Smithian
> Marxists thus try to portray economic growth as being essentially a
> technical-material process, but not a social process.

No, I think you are mistaken. My view stems from the distinction Marx
made between the 'productive powers of labour' (derived from Smith) and
historically specific 'social relations of production': Economic growth
is by definition a 'technical-material' process, i.e. the increase in
the magnitude of the elements of the output vector and its dimension, in
short a quantitative increase and qualitative change of the productive
forces. But whether economic growth occurs and how it occurs depends on
the social relations of production.

> This is essentially an argument about the conditions for economic
> growth, the fact that "the protection, security, and defence of the
> commonwealth" is not a vendible commodity in a bilateral trading
> circuit - it is funded, according to Smith, not as intermediate
> expenditure which makes a net addition to wealth but final expenditure
> which transfers and consumes wealth. But obviously if defence
> expenditure creates more security for capitalist property, this also
> promotes growth; or if the use of lawyers mean that contractual
> obligations are met, this also benefits economic growth.

These sectors contribute to the maintenance of the social order; i.e.
the relations of production under which economic development can occur.
But your connection between 'creates more security' and 'benefits
economic' is a loose one to say the least. What are the effects of
increased employment in law firms on the overall economic system?
Capitalist firms may have greater armies of lawyers at their disposal
but the total retained profits will be decreasing and productivity
growth stagnating. Instead it is the output of the basic sector that
allows these non-basic activities that maintain the social order to take
place at all. Material reproduction sets immediate prior constraints on
the maintenance of the social order. Just as the forces of production
sets immediate prior conditions to the social relations of production.

> Similarly, Marx's concept of productive labour is purely socially
> defined and has nothing to do directly with the particular nature of
> the products produced, or with how essential the given labour is for
> the economic reproduction process. It has only indirectly to do with
> this, insofar as particular kinds of production intrinsically do, or
> do not, easily permit themselves to be transformed into means for
> capital accumulation.

Indeed, this is really the central point of our difference. Smith gave
different criteria in his discussion of productive labour: (i) a
'surplus value' criterion and (ii) a 'basic goods' criterion. Both have
some rational and Marx happened to take on (i), i.e. labour is
productive if it produces a profit.

Grieve summarizes the distinction between the criteria:

    While the /surplus value criterion/ directs attention to the source
    from which the capitalists’ profits derive -- which indeed provide
    /potential/ for capital accumulation -- the /basic goods criterion/
    puts the emphasis directly on /the specific nature of the goods
    which must be available if that potential is to be realised/; there
    is no getting away from the fact that as ‘the annual produce of the
    land and labour of any nation can be increased in its value by no
    other means, but by increasing either the number of its productive
    labourers, or the productive power of those labourers who had
    already been employed’ the possibility of ‘increasing the number of
    productive labourers’ or their ‘productive power’ depends on -- is
    constrained by -- the availability of what we are describing as
    basic goods. [Emphasis added]

I couldn't make the point better myself.

//Dave Z
P.S. Jurriaan, please keep the e-mail you are replying to at the end of
your posts, they will be easier to follow then.
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Received on Mon Jan 5 11:33:06 2009

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