[OPE-L:1332] Fwd: Re: Re: bacon and eltis and Smith

From: Paul Cockshott (wpc@dcs.gla.ac.uk)
Date: Thu Sep 23 1999 - 06:55:55 EDT

>At 09:24 21/09/99 +0100, you wrote:
>>Just one more thought (isn't there always ...), in the 1970s Bacon and Eltis
>>(two orthodox - I guess Keynesian - growth economists revisited the
>>classical (un)productive labour distinction, for reasons analogus to those
>>that motivated Jurriaan to start this thread. They wanted to be able to
>>extract from national accounting data reasons to explain the UK's relatively
>>poor rate of growth. They meandered around, but plumped on the
>>service/physical product distinction, which they claimed was based on Smith.
>>About the same time, William Baumol was elaborating his 'differential
>>productivity growth model' that argued that state provided services would
>>absorb more and more of GDP, because it was inherently more difficult to
>>increase productivity in the production of the kinds of services that tended
>>to gravitate to the state sector, whilst state sector wages would tend to
>>rise paru passu with comparable market sector wages.
>>In trying to make sense of these models with my students, it became clear
>>that they each rested on 2 basic arguments:
>>1. It is intrinsically more difficult to innovate productivity enhancing
>>technology in the service sector.
>>2. Services are intrinsically less tradeable internationally.
>What strikes me about your position Michael is that you seem to reproduce
>the distinction of Bacon and Eltis. For them, as for you, any labour that
>a vendible commodity , whether service labour or not, counts as productive.
>This of course is, as Bacon and Eltis recognised, a position originally taken
>up by Smith.
>The political effect of this revival of Smiths distinction was to provide
>a justification
>for the policies of the Thatcher government in attacking public services.
>In terms
>of the Smithian position these are unequivocably unproductive. On the other
>hand the private unproductive sector - banking, advertising etc, appears
>in the
>Smithian scheme to be productive and thus should not be a target of
>any public attacks.
>Now there certainly was a real problem of the unproductive consumption of
>surplus value in britain in the 70s, but from the figures that I computed
>at the time
>the I recall that the most rapidly growing sector of unproductive labour was
>in banks, building societies and insurance. In the years that followed, the
>public unproductive sector was attacked but the private unproductive sector
>was allowed to flourish un checked. The Smithian theory of unproductive
>labour is a specifically capitalist and appologetic one which serves the
>interests of finance capital.
>In contrast, if one takes a theory of unproductive labour based on the
>Sraffian basic commodity, one can see that certain public services are
>materially productive and contribute to the production of the social surplus,
>whilst things like advertising are unproductive and reduce the social surplus.
>The two theories have quite different political consequences.

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