From: Diego Guerrero (diego.guerrero@CPS.UCM.ES)
Date: Mon Oct 03 2005 - 05:57:48 EDT
Paul, I answer your comments in black :
Paul:
1) I see problems with both the vertical and horizontal divisions that you use.
First consider the vertical dividing line between necessary and contingent
labour.
You classify financial and legal services as 'non-contingernt' and therefore necessary
in all kinds of societies according to your definition. I would contest that. Legal services
exist primarily to contest claims of property right. In a communist country these private
property right claims would not exist and thus there would be no need for lawyers to
enforce or contest such claims.
I am talking of legal advice for instance in cases of divorce, children, etc. I believe this will keep being a problem in postcapitalist societies. Of course I share your idea about property and legal conflicts on it.
On the other hand, legal services are usually performed by firms of wage lawyers. If this is so, they produce surplus value to their employer. In case they are autonomous workers, they do not produce surplus value, of course.
2)
Financial services also exist to manage claims to private property right, and as such
are specific to a regime of private ownership. Again they would not exist in a communist
economy where there would be no share ownership and thus no share brokers etc.
Now consider the horizontal dividing line between productive and unproductive
labour. Why do you classify financial and legal services as productive?
I would content that even in a capitalist society, financial and legal services
are unproductive of surplus value.
Consider the banks, they have two sources of income: bank charges made
for carrying out transactions, and interest revenue. For the UK which has
a very large financial sector, the accounts show that bank charges only cover
a small part of the operating expenses of the banks.
The fact that the banks make an overall net profit is due to their interest
income, the fact that they charge interest on loans, but either offer no,
or very little interest on current account balances. This along with their
ability to create money enables them to grab a portion of the surplus
value created in the productive sector.
According to Marx, interest is a deduction from the total surplus value
created in the productive sector- which is divided into interest and
profit of enterprise. But this division is a subdivision of surplus value.
Charging interest does not create surplus value.
Since the workers in the banking sector are paid out of a share of surplus
value, they can not create surplus value themselves. Their wages do
not constitute variable capital. Instead they are analogous to feudal
retainers paid out of the revenues of the propertied classes.
Financial services also include transfers of money (and other services), a special type of transport of things. May be in the future there will be no money, but I think it will keep being some sort of means of payment that will need to be "transported" from here to there, etc. Of course, if we reduce its activity to money I agree with you again.
I think that the bank sector's rate of profit is fixed like in other sectors. Profit here is the difference between the sum of interests received (due to loans and credits being in the assets of bank assets) and the interests paid to people and firms, and has to be compared to total capital of the banks. But what workers in the bank sector do is the same that workers in the mining sector did (and keep doing) when producing the gold necessary for money to circulate; of course, you have to add to those miners people working in making the coins, printing notes, etc. So it is this why I believe they are productive as far as they do that.
It is the same thing that in trade. In supermarkets and malls workers do not circulate commodities more than in any other sectors. They do productive labour in transporting, ranging, stocking... commodities. Commodities are only commodities when the products that they contain are use values for the buyers as well, and they would be of no value if they did not be in the shelves waiting for their potential consumers.
3)
We have had previous discussions on this list on unproductive
labour, in 1998 , 2001, and 2003 at least, but this is the first time
that I have seen the position you are advocating being put forward.
If this is really the first time you see this, it is not a proof of these ideas being wrong. They should be debated and criticized and then we will see...
Yours,
Diego
Paul
I see problems with both the vertical and horizontal divisions that you use.
First consider the vertical dividing line between necessary and contingent
labour.
You classify financial and legal services as 'non-contingernt' and therefore necessary
in all kinds of societies according to your definition. I would contest that. Legal services
exist primarily to contest claims of property right. In a communist country these private
property right claims would not exist and thus there would be no need for lawyers to
enforce or contest such claims.
Financial services also exist to manage claims to private property right, and as such
are specific to a regime of private ownership. Again they would not exist in a communist
economy where there would be no share ownership and thus no share brokers etc.
Now consider the horizontal dividing line between productive and unproductive
labour. Why do you classify financial and legal services as productive?
I would content that even in a capitalist society, financial and legal services
are unproductive of surplus value.
Consider the banks, they have two sources of income: bank charges made
for carrying out transactions, and interest revenue. For the UK which has
a very large financial sector, the accounts show that bank charges only cover
a small part of the operating expenses of the banks.
The fact that the banks make an overall net profit is due to their interest
income, the fact that they charge interest on loans, but either offer no,
or very little interest on current account balances. This along with their
ability to create money enables them to grab a portion of the surplus
value created in the productive sector.
According to Marx, interest is a deduction from the total surplus value
created in the productive sector- which is divided into interest and
profit of enterprise. But this division is a subdivision of surplus value.
Charging interest does not create surplus value.
Since the workers in the banking sector are paid out of a share of surplus
value, they can not create surplus value themselves. Their wages do
not constitute variable capital. Instead they are analogous to feudal
retainers paid out of the revenues of the propertied classes.
We have had previous discussions on this list on unproductive
labour, in 1998 , 2001, and 2003 at least, but this is the first time
that I have seen the position you are advocating being put forward.
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