[OPE] Productive and unproductive labour in the financial sector

From: Jurriaan Bendien <adsl675281@telfort.nl>
Date: Wed Jul 15 2009 - 12:48:37 EDT

I don't know any Marxist who has argued that the financial sector is
productive, generally the argument is that its function is productive only
insofar as it facilitates the circulation of money, commodities and capital,
and can reduce the capital costs of productive enterprises. As said, I am
not a Marxist. I haven't yet written up my take on productive labour for
official publication under my name, see however my article
http://en.wikipedia.org/wiki/Productive_and_unproductive_labour which maps
out a few conceptual distinctions.

I have argued bank labour is productive if it produces profit for the bank.
But I have also argued for different definitions of productive labour,
depending on the problem on hand. You can have a universal metaphysical
definition of productive labour, but you could also acknowledge that there
is no objective definition possible and that different definitions can be
made depending on the purpose of the analysis. The definition of PUPL is
logically completely separate from the question of what the real material
basis of the economy is for the purpose of maximizing economic growth. Many
workers whom Marx classify as productive in fact produce nothing tangible.

Financial labour is regarded by Marxists as unproductive insofar as it does
not itself directly create net additions to material wealth "by the labour
it performs", a point hotly disputed however by finance people. But the work
that the financial sector does is certainly production, and the orthodox
Marxist analysis is far too crude, since it makes no empirical analysis of
the components and demarcation of the labour activities of the financial
sector. In reality, many financial institutions for instance actively manage
productive enterprises and productive investment projects, or overlap with
productive enterprises, and thus, at least part of this managerial labour is
included in what Marx called the "Gesamtarbeiter", the total productive
workforce. This is the result of the fact that more and more of production
is directly owned by financial institutions.

Contrary to what Fred Moseley argued, as I noted previously on OPE-L, Marx
explicitly included the productive and coordinating functions of
"management" , in contrast to social control functions,within the realm of
productive labour.
http://archives.econ.utah.edu/archives/marxism/2005w02/msg00078.htm
Admittedly a "supervisor" in the US has a different connotation than it has
in Europe - in the US, the supervisor is more likely to be engaged "only" in
supervision, rather than engage directly in producing output. At least so I
am told.

Here's Marx:

"The work of supervision and management necessarily arises everywhere when
the direct production process takes the form of a socially combined process,
and does not appear simply as the isolated labour of separate producers. It
has, however, a dual nature. On the one hand, in all labour where many
individuals cooperate, the interconnection and unity of the process is
necessarily represented in a governing will, and in functions that concern
not the detailed work but rather the workplace and its activity as a whole,
as with the conductor of an orchestra. This is productive labour that has to
be performed in any combined mode of production. On the other hand - and
quite apart from the commercial department - this work of supervision
necessarily arises in all modes of production that are based on opposition
between the worker as direct producer and the proprietor of the means of
production. The greater this opposition, the greater the role that this work
of supervision plays. It reaches its high point in the slave system."

Karl Marx, Das Kapital (1894), Dietz ed. p. 397. Pelican edition, p. 507
(translation corrected by JB).

The thread where I discussed this with Ahmet Tonak is e.g. here (OPE-L
archives, January 2005):

http://archives.econ.utah.edu/archives/marxism/2005w02/msg00246.htm
http://archives.econ.utah.edu/archives/marxism/2005w02/msg00263.htm

In my own theory, the crude, static, anti-dialectical Marxist
"classification" of productive labour according to output type is
wrongheaded, partly because it does no justice to the changing divisions of
labour and Marx's concept, and because the more relevant classification is
the occupational and institutional classification, which almost nobody has
critically studied.

If, for example, functions which were previously contained in a
manufacturing establishment are separated out into special services, then it
seems, statistically, as though the manufacturing workforce declines. In
reality that isn't the case to the same degree as you might think, as
indicated by the growth of goods production and its value, in the NIPAs for
example. Indeed, the number of people directly involved with manufacturing
could even increase, except that these services are statistically allocated
to other output sectors, and therefore their real contribution to
manufacturing is hidden. That is why the most reliable statistical approach
focuses on the occupational division of labour (what people actually do) and
the institutional classification of enterprises into market
production/non-market production, public sector/private sector. If
manufacturing establishments outsource services rather than produce them
in-house, this affects their intermediate production and net output,
obviously.

Jurriaan - PS here again my brief analysis of US data (meantime, the
proportions have already significantly changed, whether due to real entries
and exits, or because of definitional changes).

US 2002 estimates for the division of labour

Statistics may help to reveal some of the dimensions of the division of
labour. This example concerns the USA.

First, we can derive the basic employment categories in the USA in 2002 in
approximate figures from BLS data, as follows (working our way down from the
total population):

  a.. American total resident population 288 million
  b.. population (16+) 224 million
  c.. economically active population 218 million
  d.. total civilian non-institutional population (16+) 215 million
  e.. population 16-65 years old 188 million
  f.. civilian labour force 145 million
  g.. employed civilian labour force 137 million
  h.. Unpaid family workers 0.03 million
  i.. employers 10 million (4.9 million distinct firms, 7 million
establishments)
  j.. self-employed (farm) 1 million
  k.. self-employed (non-farm) 9 million
  l.. wage & salary earners 136 million
  m.. employees 127 million
  n.. government employees 20 million
  o.. private sector workforce 105 million
  p.. Parttime workers non-farm 27 million
  q.. Parttime workers farm 0.5 million
  r.. private sector waged employees 95 million
  s.. unionised wage earners 18 million
We can then look at the proportions of what the total American population
actually did in 2002, in approximate figures and broad categories:

  a.. Children (under 16, not working for pay) 64 million
  b.. Retired (over 65, not in the labour force) 28 million
  c.. Fulltime housewives, house-husbands and idle not working for pay 22
million
  d.. Industrial production workers 26.2 million
  e.. Managers and executives 15.8 million
  f.. Clerical and administrative workers 15.3 million
  g.. Sales workers 15 million
  h.. Reserve army of unemployed 13 million
  i.. Engineers, architects, technicians, programmers and scientists 10.5
million
  j.. Employers of workers, all kinds 9.8 million
  k.. Supervisors of workers, all kinds 9.1 million
  l.. Teachers, professional childcare workers and paid childcare assistants
8 million
  m.. Transport workers 5 million
  n.. Unskilled labourers, handlers and helpers 4.8 million
  o.. Aides, ushers, guides, orderlies, and attendants 4.8 million
  p.. Personal care, health and medical workers 4.3 million
  q.. Cleaners, janitors, private cooks, maids & housekeepers 3.7 million
  r.. Accountants, auditors, underwriters, and financial officers 2.6
million
  s.. Adults in institutional care n.e.c. 2.5 million
  t.. Specialists & consultants in human resources, PR and labour relations
2.1 million
  u.. Prison & jail inmates 2 million
  v.. Artists, entertainers & designers, photographers, professional
athletes, recreational services 1.6 million
  w.. Nursing home residents 1.6 million
  x.. Fulltime criminals and lumpenised, not in corrective institutions 1.5
million
  y.. Lawyers, judges and legal assistants 1.3 million
  z.. Therapists, counselors, social workers and welfare service aides 1.2
million
  aa.. Police, detective, and law enforcement officers 1.2 million
  ab.. Medical doctors, dentists, vetinarians, optometrists, and podiatrists
1.1 million
  ac.. Military personnel, domestic 1.1 million
  ad.. Groundskeepers, gardeners, animal caretakers (non-farm) 1.1 million
  ae.. Security guards 1 million
  af.. Farmers 1 million
  ag.. Prostitutes 1 million
  ah.. Working children (under 16) 1 million
  ai.. Inspectors (construction, production and compliance) 0.9 million
  aj.. Editors, writers, reporters, proofreaders, librarians, archivists,
and curators 0.6 million
  ak.. Adult hospital patients 0.5 million
  al.. Religious clergy, and employees of religious institutions 0.4 million
  am.. Corrective institution & prison officers 0.3 million
  an.. Firefighting, fire prevention and pest control workers 0.3 million
  ao.. Water, sewage and electricity workers 0.2 million
  ap.. Hospice inpatients 0.1 million
  aq.. Adult psychiatric patients 0.2 million
Finally, we can look at the occupational structure of the employed labour
force (including salaried and self-employed) in the USA in 2002, in broad
categories, as follows:

  a.. Managers and executives 15,800,000
  b.. Supervisors 9,100,000
  c.. Teaching staff, all kinds 6,600,000
  d.. Machine operating and assembly workers 6,400,000
  e.. Food & beverage preparing and service workers 6,100,000
  f.. Administrative support clerks n.e.c. 5,800,000
  g.. Construction trade workers 5,300,000
  h.. Aides, ushers, guides, orderlies, and attendants 4,800,000
  i.. Mechanics and repairs workers 4,500,000
  j.. Technicians 4,300,000
  k.. Cleaners, janitors, private cooks, maids & housekeepers 3,700,000
  l.. Retail sales workers 3,400,000
  m.. Truck drivers 3,200,000
  n.. Secretaries, stenographers, and typists 3,000,000
  o.. Scientists 3,000,000
  p.. Sales representatives in finance and business services 2,900,000
  q.. Cashiers 2,900,000
  r.. Accountants, auditors, underwriters, and other financial officers
2,600,000
  s.. Engineers, architects, and surveyors 2,600,000
  t.. Freight & stock handlers, baggers & packers, machine feeders 2,400,000
  u.. Labourers & helpers 2,400,000
  v.. Registered nurses 2,300,000
  w.. Financial records processing clerks 2,200,000
  x.. Management analysts, specialists & consultants in human resources, PR
and labour relations 2,100,000
  y.. Materials recording, scheduling, and distributing clerks 1,900,000
  z.. Sales representatives in mining, manufacturing, and wholesale
1,500,000
  aa.. Childcare workers and childcare assistants 1,400,000
  ab.. Lawyers, judges and legal assistants 1,300,000
  ac.. Barbers, hairdressers, cosmeticians, pharmacists, dietitians
1,300,000
  ad.. Therapists, counselors, social workers and welfare service aides
1,200,000
  ae.. Artists, entertainers & designers 1,200,000
  af.. Police, detective, and law enforcement officers 1,200,000
  ag.. Military personnel 1,100,000
  ah.. Medical doctors, dentists, vetinarians, optometrists, and podiatrists
1,100,000
  ai.. Receptionists 1,000,000
  aj.. Security guards 1,000,000
  ak.. Working children under 16 1,000,000
  al.. Prostitutes 1,000,000
  am.. Farmers 968,000
  an.. Non-financial records processing clerks, 995,000
  ao.. Inspectors (construction, production and compliance) 955,000
  ap.. Groundskeepers and gardeners (non-farm) 940,000
  aq.. Earthmoving equipment, crane, industrial truck, forklift, lorry and
tractor operators 898,000
  ar.. Metal workers 826,000
  as.. Farm workers 726,000
  at.. Computer programmers 605,000
  au.. Bus drivers 605,000
  av.. Bank tellers 477,000
  aw.. Postal delivery workers, messengers & couriers 468,000
  ax.. Editors, writers, reporters and proofreaders 417,000
  ay.. Religious clergy, and employees of religious institutions 393,000
  az.. Personal services n.e.c. 348,000
  ba.. Taxi drivers and chauffeurs 340,000
  bb.. Street and door-to-door sales workers 334,000
  bc.. Corrective institution & prison officers 328,000
  bd.. Doctor's and dental assistants 318,000
  be.. Firefighting and fire prevention workers 262,000
  bf.. Electrical and electronic equipment assemblers 237,000
  bg.. Librarians, archivists, and curators 231,000
  bh.. Butchers and meat cutters 229,000
  bi.. Dressmakers, tailors and shoe repairers 189,000
  bj.. Professional photographers 178,000
  bk.. Animal caretakers (non-farm) 170,000
  bl.. Interviewers 169,000
  bm.. Airplane pilots, airplane staff, air traffic controllers 152,000
  bn.. Bakers and baking workers 148,000
  bo.. Recreational services workers 129,000
  bp.. Telephone operators 119,000
  bq.. Oil & mining extraction workers 115,000
  br.. Railway workers 111,000
  bs.. Cabinet makers, furniture & wood finishers, and other woodworkers
104,000
  bt.. Newspaper vendors 103,000
  bu.. Ship captains, sailors, mates & deckhands, fishermen 98,000
  bv.. Professional athletes 95,000
  bw.. Social welfare eligibility clerks 86,000
  bx.. Sales demonstrators, promoters, and models 77,000
  by.. Water and sewage treatment plant operators 77,000
  bz.. Forestry & logging workers 77,000
  ca.. Optical goods workers 72,000
  cb.. Other precision production workers n.e.c 72,000
  cc.. Pest control workers 63,000
  cd.. Food batchmakers 54,000
  ce.. Other plant & system operators 45,000
  cf.. Electric power plant operators 35,000
  cg.. Bookbinding workers 35,000
  ch.. Nursery workers 33,000
  ci.. Hand molders & shapers 21,000
  cj.. Patternmakers, layout workers, & cutters 12,000
  ck.. Bridge, lock, & lighthouse tenders 3,000
  cl.. Hunters & trappers 2,000
These 2002 figures are just intended to provide a modest indication or
illustration; of course, the way the division of labour is viewed depends
greatly on the identification, classification and aggregation principles
applied. A portion of migrant labour typically fails to be captured in the
data.

It should be emphasized that the ways in which the division of labour may be
viewed are potentially infinite. This give rise to a never-ending stream of
management literature.

Normally, statisticians focus on the main occupational activity or
employment status of members of the population; but of course individuals
may also divide their time between different activities which are still not
adequately captured in survey data.

Consequently, it is always important in making generalisations about the
division of labour to be very clear about the assumptions being made about
how people differ and what they have in common.

Jurriaan

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Received on Wed Jul 15 12:54:02 2009

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