[OPE] Services (->Paula)

Paul C.,

Adam Smith's real point was that the evolution of the division of labour
creates occupational functions which are "not self-sustaining", in the
very specific sense, that exercising those functions does not itself
generate the new income or new wealth necessary to maintain those
functions.

Consequently, exercising those functions has to be funded and supported
from income or wealth /previously generated elsewhere/.

Marx himself accepts this argument to some extent, because he argues
specifically e.g. that no new value can arise out of "trade
transactions" themselves, and consequently, that those workers who
specialize in operating those transactions, are not "productive" of any
new value.

The central issue in the debate then concerns the logical, epistemic or
empirical grounds Marx for this claim. From the point of view of the
trader, new value obviously IS generated by trading stuff, because he
sells stuff for more than he bought it for or what it cost him, and thus
he generates "new income" and new capital value for himself.

Essentially Marx argues, that /"value" can be lodged only in
labour-products/ - and insofar as just trading these products does not
increase the total amount of products that exist, trading activity
cannot create new value - it only transfers already existing value. This
seems intuitively obvious, but in practical reality much value would not
exist except for trading activity.

This problem is analogous to the problem of estimating "value-added" in
national accounts - except that for Marx, what is primarily relevant is
whether the value is "added" to CAPITAL, rather than to GROSS OUTPUT.
Labour is productive, /if it makes capital grow/, even quite
irrespective of whether it makes output grow - whether it makes output
grow, is relevant /only insofar as it makes capital grow/.

The final definite statement which we have from Marx on the topic occurs
in Capital Vol. 1:

"That labourer alone is productive, who produces surplus-value for the
capitalist, and thus works for the valorization of capital. If we may
take an example from outside the sphere of production of material
objects, a schoolmaster is a productive labourer when, in addition to
belabouring the heads of his scholars, he works like a horse to enrich
the school proprietor. That the latter has laid out his capital in a
teaching factory, instead of in a sausage factory, does not alter the
relation. Hence the notion of a productive labourer implies not merely a
relation between work and useful effect, between labourer and product of
labour, but also a specific, social relation of production, a relation
that has sprung up historically and stamps the labourer as the direct
means of creating surplus-value. To be a productive labourer is,
therefore, not a piece of luck, but a misfortune."

This statement tells us several things, inter alia:

(1) In principle it does not matter for Marx's PUPL definition whether
"material objects" are produced or not.
(2) The very same activity which is "unproductive" outside the capital
relationship, becomes "productive" if it is inside it.
(3) The concept of a productive worker is defined by (a) a relationship
between work and useful effect (b) a social relation of production.
(4) The nature of the work and its "useful effect" must be such /that it
is possible to extract a surplus value from it/, so that it indeed
"generates a new income".

But this does not ipso facto have anything to do with economic growth.

/Of course/ capital can accumulate through a redistribution of the
capital stock - all that means is that "my gain is your loss". I
accumulate capital at your expense, my pile of assets increases, as your
pile of assets decreases, in a zero sum game. This is often not
understood among Marxists, because they only jabber a ritual rhetoric
about "accumulation", they jabber the ritual phrase "accumulation"
without having any clue at all about what it means. However, David
Harvey later had a similar interpretation with his polemical concept of
"accumulation by dispossession" which implies accumulation through a
transfer of wealth rather than through a net addition to it.

I have made the same point many times, but Marxists refuse to understand
it. According to them, accumulation occurs, only if the total pile of
assets grows. This is terribly naive.

In national accounting theory, this whole issue resurfaces again because
"net additions" to wealth must somehow be distinguished from "transfers
of wealth". (See on this my forthcoming paper "The rise and decline of
GDP").

The Smithian engineering idea about "basic and non-basic goods" is
perfectly acceptable and valid, but Marx's argument is that there is no
"mechanism" within capitalism which will ensure that such a distinction
will be optimally made in reality, so that enlarged reproduction will
occur most efficiently. In fact capital accumulation can undermine the
very conditions for enlarged reproduction, devastating whole geographic
regions.

The notion that accumulation via the circuit M-M' is merely "episodic
financial trickery" is a prejudice and empirically false - this circuit
exists and persists through the whole history of capitalism.

In general, I consider Marxism is mainly useless as a guide to Marx,
precisely because Marxism is a "liturgy".

Jurriaan

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Received on Thu Jan 8 07:22:50 2009