[OPE-L:1234] Re: Re: Re: Re: Advertising and productive labour

From: Paul Cockshott (wpc@dcs.gla.ac.uk)
Date: Wed Sep 15 1999 - 09:10:15 EDT

At 12:52 15/09/99 +0200, Jurriaan Bendien wrote:

<begin quote>

Paul Cockshott wrote:

> The unproductive nature of advertising is not a matter of taste, it
> is objective. Failure to see this comes from looking at the issue
> from the standpoint of one firm rather than the industry or economy
> as a whole.

I appreciate your critique of the advertising business, its irrationality and
so on. It seems to me though that you are looking at it from the standpoint
of two firms rather than from the standpoint of the economy as a whole.

<end quote>

No. I compared the situation with two firms to that which would exist with
one. With one firm and no advertising the level of profits in the national
accounts would be higher than with two firms + advertising.

"To repeat, advertising firms also produce commodities (as well as
unproductive services), which other firms buy. The commodity producing labour
involved is surely productive, although we may not like the product they

No it is not, since its net effect is to reduce profits in the economy as a
whole. If soap production produces a surplus product of 500 million and today
must spend 300 million of that on advertising, the fact that advertising firms
return a profit of say 100 million on their sales of adverts to Unilever etc
does not make their workers productive.

With advertising:

Surplus value in soap = 500 million
Advertising cost 300 million
of which
advertising wages 200 million

Profits in soap 200 million
Profits in advertising 100 million
total profits 300 million

Without advertising:

Surplus value in soap 500 million
= profits in soap
= total profits

Hence total profits are reduced by the extent of wages in advertising.

This was the point of my taking a modified form of Sraffa's definition of the
basic commodity as my definition of productive. In my view you have to define
productiveness at the level of the conditions of production not at the level
of the conditions of distribution.

Of course in a capitalist economy with specialisation activities like
advertising are carried out by firms which sell their services as commodities,
but that is beside the point. The distinction involved in labour exchanging
against capital rather than against revenue, was a second approximation to
identifying productive labour by Marx. The first approximation was by Smith
where he defines it in terms of producing vendible commodities. Since, in
Marx's and Smith's day the most evident form of unproductive labour was
personal servants, the distinction productive/unproductive based on exchange
against capital or producing vendible commodities was a reasonable fit to the
social circumstances.

Given the further specialisation subsequently in the economy, one needs a
better conceptualisation of it. In order to do this one needs to ask why Smith
invented the idea at all.

It was in order to bring out that only certain categories of labour
contributed to the augmentation of national wealth - to material accumulation.
The distinctions that he and Marx made were in an attempt to identify which
forms of labour did this.

Following von Neumann's growth theory and Sraffa's concept of the basic
commodity we can formulate this more precisely as I did in ope-l 1149 when
speaking of Sraffa I said:

"Following his insights one could define materially productive labour as that
labour which enters directly or indirectly into all other products, or whose
direct or indirect product is necessary to the reproduction of the productive
labour force."

The labour which is materially productive in this sense is the labour which
would raise the rate of economic growth were a larger proportion of social
labour allocated to it.

Ask yourself whether the rate of growth would rise if labour was transfered
from advertising into the production of means of production + wage goods. The
answer is yes.

Similarly in Smith's day if the personal servants of the aristocracy went to
work in the mines or mills then the rate of growth would have been higher.

By focussing on the exchange against capital or revenue Marx failed to get at
the essence of the question.

The distinction between productive and unproductive labour becomes very clear
as soon as you approach things from the standpoint of planned economies
whether socialist or capitalist. The UK economy in wartime had the concept of
reserved occupations whose personel were exempt from military service. These
corresponded roughly to the productive sector. Advertising was recognised by
the capitalist state to be an unproductive sector and its employees were
subject to military service.

Remember the aim of an economy in conditions of total war is to maximise the
surplus product in the form of weapons and armies. All labour which
contributes to this is in military terms productive. This extreeme case shows
us what is involved, though of course in peacetime the surplus can take other
physical forms, the laws governing its maximisation do not change.

By constantly remaining at the level of surface relations you are in danger of
taking on the perspective of vulgar economics.

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