The self-employed and surplus value

[Red Guardian]

I'm currently making my way through Capital and following along with David Harvey's lectures (great resource). I'm having a bit of trouble wrapping my head around some of the concepts, though.

Suppose somebody is self-employed and does all the labor involved in the production of his commodity himself. For example, a baker who owns a shop and employs nobody else. Is this baker a capitalist? Does he follow the M-C-M' circuit? Another example could be a self-employed plumber.

My shaky understanding would answer no, because he buys his ingredients at their value and sells his finished product at its value, the embodiment of his labor. But it's very clear that there are bakers of this sort in the world and they make a profit. Can somebody explain this? I hope it doesn't seem very trivial. Thanks!

[The Lizard]

Some businesses are a one-person venture.

You should research network marketing. Read "The Business Of The 21st Century" by Robert Kiyosaki.

[RedWorker]

Regarding only this small part of the post:


Is this baker a capitalist?

I believe he would best classify as petty bourgeois.

[ComradeAllende]

I would think that he is both a capitalist and a worker, in the sense that he employs labor and extracts surplus value out of it to make a profit, yet the labor that he employs is actually his own. So yeah; petty bourgeois seems like the proper description.

[Red Guardian]

I would think that he is both a capitalist and a worker, in the sense that he employs labor and extracts surplus value out of it to make a profit, yet the labor that he employs is actually his own. So yeah; petty bourgeois seems like the proper description.
I know he's petty bourgeois. I was just interested in how the whole surplus value dynamic comes into play. Does that mean he's exploiting himself? That doesn't seem to make sense.

Appreciate it though!

[tuwix]

I'm currently making my way through Capital and following along with David Harvey's lectures (great resource). I'm having a bit of trouble wrapping my head around some of the concepts, though.

Suppose somebody is self-employed and does all the labor involved in the production of his commodity himself. For example, a baker who owns a shop and employs nobody else. Is this baker a capitalist? Does he follow the M-C-M' circuit? Another example could be a self-employed plumber.

My shaky understanding would answer no, because he buys his ingredients at their value and sells his finished product at its value, the embodiment of his labor. But it's very clear that there are bakers of this sort in the world and they make a profit. Can somebody explain this? I hope it doesn't seem very trivial. Thanks!

He's both capitalist and worker. Petty bourgeoisie is pretty good description. But he doesn't exploit anyone and as a worker doesn't generate surplus-value.
So he's safe from perspective of socialist economics.

[Hatshepsut]

In Vol. 1 Chap. 4, it seems there are one or more commodities in M - C - M, and the two normal transactions are purchase of C for price M1 and resale of C for higher price M2. Is our baker doing this? It seems so. He uses M1 to buy C1 (flour) and C2 (sugar), labors to convert C1 and C2 into C3 (pastry), which he sells for price M2 greater than M1. His business appears to be non-exploitative if M2 - M1 is the socially necessary living of the baker. M2 must exceed M1 by some certain amount before a surplus value is obtained, in which case it comes from the labor of whoever's buying at M2. This analysis is microeconomic; it covers only the baker, not the whole economy.

Marx will have also distinguished money that is money (store of value used for C - M - C exchanges) and money that is capital (store of value used for M - C - M). But Marx does not discuss exploitation until Chap. 9, well after he introduces surplus value in Chap. 4. In Chap. 9, the letter C stands for capital, so it's not the commodity C of Chap. 4.

What also makes things tough is that economics considers production machines as capital alongside money in M - Commodity - M, so an additional equation arises,


Capital = c + v,

where c buys replacement of machines and v buys labor. This is in Chap. 9. Since the baker works for himself, his Capital = c.

The exact term "petit bourgeois" occurs only once in Vol. 1, as footnote #26 to Chap. 1 in the edition Marxist.org carries. This note is referenced from a discussion of the relative and equivalent forms of value that occur when more than one commodity exists in a market. Note 26 says mainly that direct and universal exchangeability of commodities is desirable from the point of view of the petit-bourgeois, yet what Marx wishes to convey here is opaque to me. He is criticizing alternative formulations of socialism as well.

I'm a beginner, too. I If anyone knows how to explain this more complex situation, I'm all ears.

[Comrade #138672]

Yes. Self-employed labor still follows the M-C-M' cycle, like all capital.

[DOOM]

Marx said in his manuscripts from 63-67 that self-employed laborers are laborers and capitalists at the same time.

I believe Rubin wrote about this topic quite a bit too, didn't he?


Yes. Self-employed labor still follows the M-C-M' cycle, like all capital.

Not necessarily, some self-employed laborers don't use the value they generated to increase their capital.


He's both capitalist and worker. Petty bourgeoisie is pretty good description. But he doesn't exploit anyone and as a worker doesn't generate surplus-value.
So he's safe from perspective of socialist economics.

He isn't. He still owns means of production and is still able to accumulate capital if he's generating enough value.
Capitalism isn't only about exploitation.

[Prof. Oblivion]

I know he's petty bourgeois. I was just interested in how the whole surplus value dynamic comes into play. Does that mean he's exploiting himself? That doesn't seem to make sense.

Appreciate it though!

Well he's obviously not exploiting himself, then, because he gets the surplus. So he's getting the full value of his labor. You can't exploit yourself...

[BorisBandit]

Suppose somebody is self-employed and does all the labor involved in the production of his commodity himself. For example, a baker who owns a shop and employs nobody else. Is this baker a capitalist? Does he follow the M-C-M' circuit? Another example could be a self-employed plumber.

My shaky understanding would answer no, because he buys his ingredients at their value and sells his finished product at its value, the embodiment of his labor. But it's very clear that there are bakers of this sort in the world and they make a profit. Can somebody explain this? I hope it doesn't seem very trivial. Thanks!

A micro capitalist. That baker has to expand because M prime is going to be minute. & isn't this self-exploitation? (Not meant as a pejorative.) In order to have enough to reinvest, consumption has to be minimal.

[John Nada]

I'm currently making my way through Capital and following along with David Harvey's lectures (great resource). I'm having a bit of trouble wrapping my head around some of the concepts, though.

Suppose somebody is self-employed and does all the labor involved in the production of his commodity himself. For example, a baker who owns a shop and employs nobody else. Is this baker a capitalist? Does he follow the M-C-M' circuit? Another example could be a self-employed plumber.That baker is not floating in space. She's part of society. It's conceivable that she may not even be in a capitalist community, perhaps in an isolated feudal society.

But let's assume the baker is in the modern capitalist world. She needs raw material(such as yeast, sugar, flour, spices, oil, fuel, ect.), and a workspace with all the cookware and equipment. She likely buying from someone, sell to someone and may even need a bank for deposits and loans. She also likely competing with other bakers and big industrialized food companies.

The grain is harvested by a farmer or an agricultural laborer. The farm itself require things like fertilizer, seeds, land, farming equipment, as well as labor from someone. The farmer may be petit-bourgeoisie with modern equipment and her own land, maybe doing well or deep in debt to the bourgeoisie(landlords, agribusiness, banks, state bureaucracy, ect.). He may be a peasant who must pay rent for the land as a tenant-farmer or share-cropper. Or it could be a plantation owned by agribusiness and everything is done by proletarians.

Come harvest time, the grain is harvested, processed and sold, or retained if part of a larger company. It's stored in silos, then processed at a mill, packaged, transported and sold, either directly to the baker or another store.

Next comes the equipment. Miners blast through the ground. They too need equipment and supplies. Workers at a smelter process and refined the ore into metal. Then this metal sold to a factory, and workers make cookware from it. This is transported and sold to a store, who's workers sell this to the baker.

Next is the fuel and electricity for her bakery. Workers drill and pump out gas, which also requires supplies and equipment. More workers lay pipelines, to pipe that gas to her stove. And the electricity comes from coal mined, processed and transported by workers. Workers build, operate and maintain the power plant and the power lines that power equipment in her bakery. She now gets her utilities from workers, and pays the utility bill either to a company owned by bourgeoisie or a capitalist governement.

She wakes up early in the morning. Fires up the oven, preps the dough. She works the dough with her hands and is exhausted but must stand there doing this for hours on end. It's hot as hell and a doughy, yeasty smell permeates the air. She cleans the workspace, from floor to ceiling to prevent germs. She must get everything right, otherwise it'll all be for nothing. Standing by the oven, she waits for the dough to be baked just right, and tries to avoid burning herself.

At the end of the day it's done. Her husband comes home off a 14 hour shift in the mine, and kids just walked home from school. She just made dinner for the night, and breakfast and lunch for tomorrow, as well as some extra bread to sell to neighbors or on the streets. The job might actually give him the overtime pay this time, unlike the past few months. They can actually be full today.
My shaky understanding would answer no, because he buys his ingredients at their value and sells his finished product at its value, the embodiment of his labor. But it's very clear that there are bakers of this sort in the world and they make a profit. Can somebody explain this? I hope it doesn't seem very trivial. Thanks!It's not just quantity, but quality. Class is a social relation with a material bases, but in relation to other classes(ie serf to a lord vs a petit-bourgeois farmer to the haute-bourgeoise). She may be a proletarian, such as the housewife example. He may be in debt-bondage in a underdeveloped nation and a baker to pay the lender, and basic a slave. He could just be using the bakery as a front for organized crime, so a lumpenproletarian. He could be a bord haute-bourgeoisie who likes to cook but doesn't need to. She could have a fully automated bakery and drove out any competition, charging above value and adulterating the bread with talc, deriving rent from the proletarian customers and be bourgeoisie. Or he could be a temporary "sub-contractor" that's a de facto proletarian.

But what you're probably think of is a petit-bourgeoisie that has a tiny store or stand, and makes and sells his own commodities. Since he buys from someone and sells to someone, and possibly has debt and/or a surplus for a bank, he's still part of the C-M-C' cycle. The food holds exchange value, it's use-value is to keep people(most likely workers) fed.

Because he owns a bakery(albeit as the lone employee), this is a means of production, just a primitive one that he must put in his labor-power himself and not rich enough to hire workers. Somehow this baker hasn't been driven out of business by Walmart, nevertheless they may get rent from the hungry customers. But even operating at a loss this doesn't necessarily change things. And somewhere along the C-M-C' line, there's almost certainly exploitation in the form of taking surplus-value from the proletariat.

[Spectre of Spartacism]

Self-exploitation is a thing, if you under exploitation to be more than numerical differences between value produced and value appropriated. The idea behind exploitation is that a person is using one's self (or another person) for ends that are not conducive to the fullest and freest flourishing of that person.

To answer the OP, the self-employed individual belongs to the class of the petty bourgeoisie, the small capitalists, who exploit while being exploited.

[Voltaire]

As a self employed Baker who runs a micro bakery (yep really) I certainly don't consider myself a petite bourgeoisie. I don't own any premises, I rent a village hall to bake in and hire market stalls to sell from. I don't aspire to grow my business (I believe it is assumed that petite bourgeoisie were trying to become haute bourgeoisie, and I most certainly am not) The micro bakery pays for itself and pays me a very small salary (about 1/3 of minimum wage) It is a passion and I love it, also due to various health reasons I don't want/need to go into I'm unable to work in employment or full time. Interesting when it's real and no longer hypothetical :)

[Decolonize The Left]

It may be helpful to remember that capital is not a thing, but a social production relation. This is to say two things:
1) Capital can move through the cycle of M-C-M, but this cycle is not capital itself.
2) Capital is a way in which two things are brought together. These two things are the means of production and labor power and the way is the wage. Thus, capital is the means of production and labor power brought together through the wage and, as a direct result of this relationship, surplus value is produced.

The question of the small business owner, from the strict structuralist perspective, is whether or not that relationship is in play.

[Rafiq]

Also, there are still questions we should be thorough in answering: What constitutes the petite-bourgeoisie? No question provokes more controversy.

Is it defined by a relationship to profit specifically, or more generally private property? Zizek also brings in a good point - many of the property-less, those working in cubicles, in financial firms, etc. - cannot fit the qualifications for the proletariat, not merely because they make much more money, but because they do not produce commodities and are largely relegated to an administrative role - we ought not to forget managers either. Should we recognize this as the organs of labor aristocracy, or use his term - the "salaried bourgeoisie"? Such questions are important.

[Anglo-Saxon Philistine]

I know he's petty bourgeois. I was just interested in how the whole surplus value dynamic comes into play. Does that mean he's exploiting himself? That doesn't seem to make sense.

Why not? The problem seems to be that people conceive of exploitation as some sort of moral category; it's not, it's an economic category. Think of it as exploitation of a resource. The member of the haute bourgeoisie and the more well-off member of the petite bourgeoisie exploits the labour of his hired workers. The impoverished member of the petite bourgeoisie exploits his own labour. In each cycle of reproduction, he must divide the money he receives between his private consumption and the M-C-M' cycle. He exploits his own labour because, if he does not please to be ejected from the market, the money he sets aside for his personal consumption will be, more or less, what is necessary to reproduce his own labour. The rest goes - the rest must go - to the M-C-M' cycle. (This is also part of the reason why co-ops are crock as a solution to the problems of capitalism.) Effectively, his work is divided between the functions he preforms as a labourer and as a capitalist. The capitalist takes from the labourer to expand his business so that he can remain on the market.

(Some self-employed people are able to remain on the market without expanding their capital, as DOOM notes, but this generally requires exceptional circumstances.)


I don't aspire to grow my business (I believe it is assumed that petite bourgeoisie were trying to become haute bourgeoisie, and I most certainly am not)

The point is not that individual members of the petite bourgeoisie wish to become members of the haute bourgeoisie, but that the market drives them to expand their operation or be ejected (unless, again, some truly exceptional circumstances are in force).


So he's safe from perspective of socialist economics.

"Socialist".

[Luís Henrique]

A micro capitalist. That baker has to expand because M prime is going to be minute. & isn't this self-exploitation? (Not meant as a pejorative.) In order to have enough to reinvest, consumption has to be minimal.

Exploitation is the systemic transfer of wealth from one part to another. You cannot exploit yourself.

On the other hand, you can be exploited by "your own" "capital".

Luís Henrique

[Luís Henrique]

I'm currently making my way through Capital and following along with David Harvey's lectures (great resource). I'm having a bit of trouble wrapping my head around some of the concepts, though.

Suppose somebody is self-employed and does all the labor involved in the production of his commodity himself. For example, a baker who owns a shop and employs nobody else. Is this baker a capitalist? Does he follow the M-C-M' circuit? Another example could be a self-employed plumber.

My shaky understanding would answer no, because he buys his ingredients at their value and sells his finished product at its value, the embodiment of his labor. But it's very clear that there are bakers of this sort in the world and they make a profit. Can somebody explain this? I hope it doesn't seem very trivial. Thanks!

In this thread, "The October Revolution & The Soviet Union: What went wrong?" (http://www.revleft.com/vb/october-revolution-soviet-t178671/index.html), LinksRadikal and me had a long discussion on the nature of the petty bourgeoisie and exploitation, starting around post #37, that might of some help.

Luís Henrique

[Decolonize The Left]

In this thread, "The October Revolution & The Soviet Union: What went wrong?" (http://www.revleft.com/vb/october-revolution-soviet-t178671/index.html), LinksRadikal and me had a long discussion on the nature of the petty bourgeoisie and exploitation, starting around post #37, that might of some help.

Luís Henrique

And I have now split that discussion into a new thread in Learning which can be found here: http://www.revleft.com/vb/nature-petty-bourgeoisie-t193894/index.html?t=193894

[Luís Henrique]

OK. Since Manoir de mes reves has split the more theoretical aspects of this discussion to another thread, I will try to address the issue from a more down-to-earth standpoint.

It strikes me as actually impossible that a baker works completely alone; it is impossible to make bread and sell it simultaneously. In my experience, a bakery team needs at least three people, one a the oven, one at the cash register, and one at the counter to function properly.

It does not necessarily follow that there is one boss and two employees; it might be a family, as in three siblings or father, mother and son, or a group of friends who are partners and all of them work at the business.

But if there is one boss and two employees, it is almost certain that the boss works at the cash register, not at the oven.

This team, however, still needs "labour" performed by other people, especially a bookkeeper, perhaps a deliverer (motoboy or something like that), and a cleaning person. Those are more likely to be hired, but, as they do not generate value, it is tricky to say they are exploited by the business. The bookkeeper in particular does seem to deal with the bakery on an equal level at least, and will basically sell a service, not labour power. The cleaning person will be certainly subordinate, and may or may not be a wage worker; but he doesn't produce commodities, so the relation is not one of extraction of surplus value.

More importantly, the bakery quite certainly isn't an isolated thing; it depends not only on its costumers, but upon a series of other businesses - banks, publicity agencies, providers of raw materials, etc. These relations are not necessarily relations between equals; those that are not productive - especially banks - will encroach into the value produced at the bakery.

If the bakery was a capitalist company, this redistribution of value would be limited to the average profit rate (if its profit rate is lower than the average profit rate, its owners will move their capital into other branches of business, tending to equalise the rate of profit).

But if it is not a capitalist company, as it would seem, then the redistribution of value isn't limited by the average profit rate; instead, it is limited to the subsistence level of the owners and their business. If so, the owners are petty-bourgeois, not bourgeois; their funds and means of production do not constitute capital (ie, self-aggrandising money), but merely provide their subsistence. In other words, the gains they make by producing and selling bread are limited by the average wage of workers (in the case, cashiers, counter salespeople, and bakers), below which running and independent business makes no sence, added to the cost of replacement of their means of production (rent of a room with a kitchen, depreciation of the oven, etc). Profits properly will quite certainly flow to bigger companies upon which they depend.

Luís Henrique

[Luís Henrique]

However, even this very low level of reproduction requires some scale.

Supposing that the average monthly wages for bakers, cashiers, and counter attendants are $ 900, that their average labour journey is 180 hours a month, and that a loaf of bread gives them a net gain of $ 0.30, they will need to make $ 2,700 a month, or 9,000 loaves of bread a month - 300 per day. If a loaf of bread takes 30 minutes to be made (supposing, of course, that the baker keeps making dough while the previous batch is at the oven), then this means making 300 loaves in 16 batches, wich requires an oven capable of baking 20 loaves at a time.

This would allow them to work with a quite simple and small oven (which is one of the reasons that bakeries are a trade still dominated by the petty bourgeoisie); but since they will have to pay rents, and to be able to buy a new oven when the present one wears off (and to pay for repairs, which by the way requires them to have a step oven to keep the work going one while repairing the main one), it is easy to see that they will need more oven capacity than merely 20 loaves per batch.

Moreover, any productivity gains in the trade will imply larger scales (or the ability to turn bread baked at lower productivity levels into a different commodity that fulfills a different use-value, which is possible but not trivial). So, as it is well known since Marx's times at least, these people will live at the constant threat of losing their firm and becoming mere wage workers.

Luís Henrique

[Decolonize The Left]

But if it is not a capitalist company, as it would seem, then the redistribution of value isn't limited by the average profit rate; instead, it is limited to the subsistence level of the owners and their business. If so, the owners are petty-bourgeois, not bourgeois; their funds and means of production do not constitute capital (ie, self-aggrandising money), but merely provide their subsistence. In other words, the gains they make by producing and selling bread are limited by the average wage of workers (in the case, cashiers, counter salespeople, and bakers), below which running and independent business makes no sence, added to the cost of replacement of their means of production (rent of a room with a kitchen, depreciation of the oven, etc). Profits properly will quite certainly flow to bigger companies upon which they depend.

Luís Henrique

It is not capitalist only in the sense that the result of the social production relation (money recouped from bringing the oven, materials, and labor together) is not recapitalized. In other words, the M-C-M cycle is broken to the degree that the last M doesn't have the little one next to it indicating that it has produced surplus value. This is what I take you to mean when you say that the money produced from selling bread is used for subsistence.

On the other hand, it is very capitalist in the sense that the actual social production relation is still wage labor confronting accumulated labor as alien. And given that capital not just the production of surplus value (that is but the goal of capital), rather, it is defined by the wage being the bonds between the means of production and labor power (as well as the resulting alienation), then it follows that the baker described above is both capitalist and not capitalist at once.

The baker has kept all the necessary components of capital and brought them together in the correct fashion, however, they have stripped capital of its goal. Thus, the baker does not do away with the mechanisms of capital--at any moment they could become a complete capitalist--rather, they have done away with the end. I would qualify this situation as means-capital vs. end-capital. Real capitalists have their means and ends aligned, while the baker only has means-capital in place. This said, end-capital is necessary to be turned back into means-capital (think M-C-M1 cycle where M is the means-capital and C is the end-capital) and so the baker's system is ripe for capitalist accumulation.

[Luís Henrique]

It is not capitalist only in the sense that the result of the social production relation (money recouped from bringing the oven, materials, and labor together) is not recapitalized. In other words, the M-C-M cycle is broken to the degree that the last M doesn't have the little one next to it indicating that it has produced surplus value. This is what I take you to mean when you say that the money produced from selling bread is used for subsistence.

It certainly produces surplus value. But this surplus value is redistributed to other companies, via rents, interests, monopolistic profits, etc. And to the State, via taxes. In good times, some of it may allow the bakery owners a subsistence above the subsistence of ordinary workers, and/or to keep up with average the productivity level in the trade. In bad times, the redistribution via rents, interests, taxes, etc., may encroach on their subsitence level, making it lower thatn that of ordinary workers (in which case, unless they have reserves, they will go bankrupt and back to the proletariat).


On the other hand, it is very capitalist in the sense that the actual social production relation is still wage labor confronting accumulated labor as alien.

This if they employ wage labour. But we are explicitly discussing the case where they don't.

To the extent that this is "capitalist", then we are talking about the capital of others (flour factories, banks, credit card companies, imobiliary companies, etc.): the bakery accumulates capital for those, not for its owners.


And given that capital not just the production of surplus value (that is but the goal of capital), rather, it is defined by the wage being the bonds between the means of production and labor power (as well as the resulting alienation), then it follows that the baker described above is both capitalist and not capitalist at once.

I don't think this is a correct definition of capital. Otherwise, what would we make of companies that are unproductive? They certainly aren't defined by wage being the bond between means of production and labour power, since they don't produce - and so, their "means" are means of something else, not "means of production".

I think we should either stick with a simpler definition of capital - that capital is money that begets more money - or, if we are to go for more sophistication, to understand capital as a process, a cyclic process that successively undergoes the phases of money capital, commodity capital (twofold as constant and variable capital), commodity capital again, but as different commodities, the ones that are produced, not the ones that are used in production, and finally money again, but increased money. The problem with the more sophisticated definition, however, is that it applies only to productive capital, and leaves commercial capital and finance capital unaccounted for.

The more sophisticated definition, moreover, is not appliable where the relations of production are not capitalist; and if our bakers do not employ wage labour, as prompted in the OP, then they certainly cannot extract surplus value from anyone else via wages. If they were capitalists, they would have to be unproductive capitalists - but what they certainly aren't, at all, is improductive, since they produce value, in the form of loaves of bread.


The baker has kept all the necessary components of capital and brought them together in the correct fashion, however, they have stripped capital of its goal. Thus, the baker does not do away with the mechanisms of capital--at any moment they could become a complete capitalist--rather, they have done away with the end.

The bakers certainly have not stripped capital of its goal; it continues to accumlate through their work, it just doesn't accumulate in their pockets, but rather on the pockets of someone else. In other words, it is capital that has stripped the bakers from their goal, not the other way round.

Plus, it is not true that the bakers could become complete capitalists at any moment. While that is not impossible, it is a function of factors that are well beyond their wishes, whims, or decisions: a prolonged economic boom, coupled with a relatively stable level of productivity on the trade (conditions that, perhaps not coincidentally, are also the conditions under which labour performs best in its distributive conflicts with capital).


I would qualify this situation as means-capital vs. end-capital. Real capitalists have their means and ends aligned, while the baker only has means-capital in place. This said, end-capital is necessary to be turned back into means-capital (think M-C-M1 cycle where M is the means-capital and C is the end-capital) and so the baker's system is ripe for capitalist accumulation.

The bakers can only turn into actual capitalists, or "real capitalists" as you put it, if the redistribution of value to other companies and individuals is not bigger than the difference between M' and M.

Luís Henrique

[Luís Henrique]

To put it into a graphic:

http://ideias.wikidot.com/local--files/companhias/imagem.bmp

in which c = constant capital, v = variable capital, m = surplus value, t = value transferred to other companies, individuals, and State, l = consumption funds, and
a = capitalised surplus value.

The graphic in the left would be a normal productive capitalist company. It generates enough value to reproduce its means of production, to pay its employees, to pay rents, interests, taxes, and monopolistic gains to its providers, to allow its owners a lifestyle compatible with their social status, and to accumulate capital by buying new means of production and/or hiring more employees.

The graphics in the centre and right (not on the same scale as the one in the left) would be petty bourgeois firms. In the centre, one that can reproduce its means of production, allow their owners the same earnings as average workers in their trade (v), pay its rents, interests, taxes, and monopolistic gains to its providers, plus some more surplus value that can be either turned into higher standards of living (l) or accumulated as expanded means of production (a). To the right, a petty bourgeois firm that can only reproduce its means of production, allow its owners the same earnings as average workers in their trade (v), and pay its rents, interests, taxes, and monopolistic gains to its providers, but not an improved lifestyle nor expansion of means of production.

Luís Henrique

[ckaihatsu]

This team, however, still needs "labour" performed by other people, especially a bookkeeper, perhaps a deliverer (motoboy or something like that), and a cleaning person.


Your putting of 'labor' into quotation marks (to indicate a less-than-literal meaning) isn't warranted -- white-collar (bookkeeper) and pink-collar (deliverer and cleaning person) work is *still* labor, alongside blue-collar (baking loaves) labor.

The argument that such *isn't* labor might be valid only if the 'team' (baker, shopkeep, cashier, bookkeeper, deliverer, and cleaning person) were all *equity partners* in the business, with roughly equivalent buy-ins and splits of whatever profits accrued.

Otherwise -- more typically -- such costs of doing business *would* be outsourced to wage labor, and the shopkeeper, cashier, bookkeeper, deliverer, and cleaning person *would* be wage laborers.





Those are more likely to be hired, but, as they do not generate value, it is tricky to say they are exploited by the business.


These roles *do* generate value for the bakery business because such labor enables the selling of bread -- if the business could do without them then it would in order to save on costs.

And *of course* such wage work is exploited because these wage laborers are *not* treated as being equal equity partners in the ownership of the business.





The bookkeeper in particular does seem to deal with the bakery on an equal level at least, and will basically sell a service, not labour power.


You're falsely dichotomizing 'service' (white-collar or pink-collar) from 'labor power', for some reason. (Labor is *not only* blue-collar.)





The cleaning person will be certainly subordinate, and may or may not be a wage worker;


This description goes for all of the work roles that are not done by owners themselves, as delineated above.





but he doesn't produce commodities, so the relation is not one of extraction of surplus value.


This is incorrect -- you're equating only blue-collar work as being 'productive'.

[Luís Henrique]

Your putting of 'labor' into quotation marks (to indicate a less-than-literal meaning) isn't warranted -- white-collar (bookkeeper) and pink-collar (deliverer and cleaning person) work is *still* labor, alongside blue-collar (baking loaves) labor.

It is certainly work, but I'm not sure it can be called labour. In any case, it is unproductive labour, ie, it may generate wealth (as it certainly is the case of the cleaning person and the deliverer), but it doen't generate value.


The argument that such *isn't* labor might be valid only if the 'team' (baker, shopkeep, cashier, bookkeeper, deliverer, and cleaning person) were all *equity partners* in the business, with roughly equivalent buy-ins and splits of whatever profits accrued.

This seems impossible unless they actually take turns at each tasks, which would be a very rare occurrence (perhaps prevented by Comparative Advantages).

Particularly, a bookkeeper would never join in such arrangement: if she only works as bookkeeper, she will have a much smaller amount of work to do than any other members of the team; and she won't accept taking turns at the different tasks, because she can earn much more by working full time as a bookkeper - even as a wage slave for a bookkeeping company.


Otherwise -- more typically -- such costs of doing business *would* be outsourced to wage labor, and the shopkeeper, cashier, bookkeeper, deliverer, and cleaning person *would* be wage laborers.

Or not.

Most probably, they would be wage labourers, but for another company, not for the bakery. They can be also be paid for the task, instead of for their time.

I have never seen a bakery in which the baker is the owner and cashier is a wage labourer. The cashier can and does have control over the whole workplace, which the baker cannot have, and so if there is a proprietor who hires wage slaves but still needs to work, then such proprietor will chose the cash register, not the oven.


These roles *do* generate value for the bakery business because such labor enables the selling of bread -- if the business could do without them then it would in order to save on costs.

No. These roles provide the environment in which the creation of labour is possible, but they are unproductive: they do not create sellable commodities, and so do not generate value. And this is the reason we seldom see these roles being exerted by the company employees: they are either wage labourers for other companies (that sell their services as a commodity), or they are self-employed. Which means, the business does do without them, and saves on costs.


And *of course* such wage work is exploited because these wage laborers are *not* treated as being equal equity partners in the ownership of the business.

The bookkeeper, for instance, is usually, almost always, quite clearly at a higher status than the bakery owners - even if such bookkeeper is himself a wage slave. But "exploitation" is not tantamount to being not treated equally (a soldier is not equal to a general, but the relation is not one of exploitation). Exploitation is the systemic, unreciprocal transfer of value from some people to other people.


You're falsely dichotomizing 'service' (white-collar or pink-collar) from 'labor power', for some reason. (Labor is *not only* blue-collar.)

No; the distinction is elswhere.

White collar or pink collar workers can be, and often are, productive labourers. The distinction is between those who produce commodities for their masters - commodities that can be sold at their full value, allowing the employers to pocket the difference between the value of the newly produced commodity and the value of the labour power of the labourer - and those who do not produce commodities, meaning that their employers cannot exploit them because they cannot sell anything at a higher value than the value of the labour power of the labourer.

It is not a moral distinction. It isn't even a professional distinctions: a teacher in a State school is unproductive, since the school does not sell commodities; a teacher in a private school is productive, because the school does sell the services provided by its teachers as a commodities, and profits on the difference between the value of its courses and the value of the labour power of its teachers.

"Productive labour" is this, and only this: labour that produces surplus value for capital.


This is incorrect -- you're equating only blue-collar work as being 'productive'.

By no means:

http://ideias.wdfiles.com/local--files/ideias/trabalho%20produtivo%20e%20trabalho%20improdutivo. png

There you have examples of productive and unproductive blue collar (baking), white collar (bookkeeping), and pink collar (cleaning, gardening) labour. Plus teaching, the colour of which collar I don't know.

I am not a member of the "proud to be a worker" crowd.

Luís Henrique

[Luís Henrique]

The above is, of course, directly based in Marx:


Productive labour is here defined from the standpoint of capitalist production, and Adam Smith here got to the very heart of the matter, hit the nail on the head. This is one of his greatest scientific merits (as Malthus rightly observed, this critical differentiation between productive and unproductive labour remains the basis of all bourgeois political economy) that he defines productive labour as labour which is directly exchanged with capital; that is, he defines it by the exchange through which the conditions of production of labour, and value in general, whether money or commodity, are first transformed into capital (and labour into wage-labour in its scientific meaning).

This also establishes absolutely what unproductive labour is. It is labour which is not exchanged with capital, but directly with revenue, that is, with wages or profit (including of course the various categories of those who share as co-partners in the capitalist’s profit, such as interest and rent). Where all labour in part still pays itself (like for example the agricultural labour of the serfs) and in part is directly exchanged for revenue (like the manufacturing labour in the cities of Asia), no capital and no wage-labour exists in the sense of bourgeois political economy. These definitions are therefore not derived from the material characteristics of labour (neither from the nature of its product nor from the particular character of the labour as concrete labour), but from the definite social form, the social relations of production, within which the labour is realised. An actor, for example, or even a clown, according to this definition, is a productive labourer if he works in the service of a capitalist (an entrepreneur) to whom he returns more labour than he receives from him in the form of wages; while a jobbing tailor who comes to the capitalist’s house and patches his trousers for him, producing a mere use-value for him, is an unproductive labourer. The former’s labour is exchanged with capital, the latter’s with revenue. The former’s labour produces a surplus-value; in the latter’s, revenue is consumed.

All emphases mine.

Luís Henrique

[Sewer Socialist]

It is certainly work, but I'm not sure it can be called labour. In any case, it is unproductive labour, ie, it may generate wealth (as it certainly is the case of the cleaning person and the deliverer), but it doen't generate value.


The transportation industry absolutely is productive labor; it creates utility by allowing the commodity user to access the commodity, much like the miner allows the ore processing plant to access raw material. Neither are creating anything, but taking something already existing and moving it.


White collar or pink collar workers can be, and often are, productive labourers. The distinction is between those who produce commodities for their masters - commodities that can be sold at their full value, allowing the employers to pocket the difference between the value of the newly produced commodity and the value of the labour power of the labourer - and those who do not produce commodities, meaning that their employers cannot exploit them because they cannot sell anything at a higher value than the value of the labour power of the labourer.

And yet, trucking and courier companies hire wage labor (and sometimes commission pay based on productivity), and turn around and sell those services at a profit. This also satisfies your condition here:



a clown, according to this definition, is a productive labourer if he works in the service of a capitalist (an entrepreneur) to whom he returns more labour than he receives from him in the form of wages.




http://ideias.wdfiles.com/local--files/ideias/trabalho%20produtivo%20e%20trabalho%20improdutivo. png


I don't know where this is from, but the bookkeeping example is incorrect by the definition you have provided; the waged bookkeeper of a factory is a productive laborer.

[ckaihatsu]

Your putting of 'labor' into quotation marks (to indicate a less-than-literal meaning) isn't warranted -- white-collar (bookkeeper) and pink-collar (deliverer and cleaning person) work is *still* labor, alongside blue-collar (baking loaves) labor.





It is certainly work, but I'm not sure it can be called labour. In any case, it is unproductive labour, ie, it may generate wealth (as it certainly is the case of the cleaning person and the deliverer), but it doen't generate value.


---





These roles *do* generate value for the bakery business because such labor enables the selling of bread -- if the business could do without them then it would in order to save on costs.





No. These roles provide the environment in which the creation of labour is possible, but they are unproductive: they do not create sellable commodities, and so do not generate value. And this is the reason we seldom see these roles being exerted by the company employees: they are either wage labourers for other companies (that sell their services as a commodity), or they are self-employed. Which means, the business does do without them, and saves on costs.


---


I agree with your overall taxonomy, Luis, but I differ with some parts of your own *application* of it.

Again, I'll insist that for any given private, profit-oriented enterprise (the private sector, basically), *any* labor is 'productive' if it is at all part of the enterprise and its regular activity of commodity production.

This means that as long as the services of 'cleaning' and 'delivery' are used by the enterprise, they are just as much 'productive' as 'baking'.

One way of 'checking' this is to ask if the services of 'cleaning' and 'delivery' would be considered 'productive' by enterprises that only do cleaning and delivery, respectively -- *of course* they would be considered productive there, because that's what cleaning and delivery businesses are all about, and they exploit the wage laborers who do the actual work of cleaning and making deliveries. It would be no different if these job roles were simply 'in-house', as part of a *larger* enterprise that, for example, bakes bread.


---





There you have examples of productive and unproductive blue collar (baking), white collar (bookkeeping), and pink collar (cleaning, gardening) labour.


The only difference I have with your chart and its categorizations is the 'bookkeeper in an automobile factory'. I'll maintain that such *is* productive labor since it is considered *necessary* to the private enterprise by its ownership -- therefore it's part of the production process of making cars.





Plus teaching, the colour of which collar I don't know.


Teaching is 'white-collar', meaning 'tending towards mental work, and administration over the work of others'.





I am not a member of the "proud to be a worker" crowd.


Acknowledged.

[Decolonize The Left]

LH, the argument you provide above is confusing. Marx writes that "productive labor" is that which is exchanged with capital but, as we know, capital is not a thing, rather, a social production relation. I ask, then, how can labor be exchanged with a relation?

Furthermore, I can understand that labor must produce surplus value to be considered productive (this, by the way, is a much simpler explanation than that provided above), but, if this is so, then the table is desperately lacking. By this I mean that the teacher in the public school does produce surplus value, only it is returned to the state and not to the private enterprise (it is indeed capitalized upon, just in the hands of the government). Likewise, it would seem, the bookkeeper for the auto company also produces surplus value which is capitalized.

[Decolonize The Left]

It certainly produces surplus value. But this surplus value is redistributed to other companies, via rents, interests, monopolistic profits, etc. And to the State, via taxes. In good times, some of it may allow the bakery owners a subsistence above the subsistence of ordinary workers, and/or to keep up with average the productivity level in the trade. In bad times, the redistribution via rents, interests, taxes, etc., may encroach on their subsitence level, making it lower thatn that of ordinary workers (in which case, unless they have reserves, they will go bankrupt and back to the proletariat).

This if they employ wage labour. But we are explicitly discussing the case where they don't.

To the extent that this is "capitalist", then we are talking about the capital of others (flour factories, banks, credit card companies, imobiliary companies, etc.): the bakery accumulates capital for those, not for its owners.

Understood.


I don't think this is a correct definition of capital. Otherwise, what would we make of companies that are unproductive? They certainly aren't defined by wage being the bond between means of production and labour power, since they don't produce - and so, their "means" are means of something else, not "means of production".

Unproductive companies go bankrupt--they fail according to capitalist standards. Productivity, according to your definition above, results from labor being exchanged with capital (thus producing surplus value). This can be rephrased as labor power being brought together with the MoP to produce surplus value (through the mechanism of the wage), no?


I think we should either stick with a simpler definition of capital - that capital is money that begets more money - or, if we are to go for more sophistication, to understand capital as a process, a cyclic process that successively undergoes the phases of money capital, commodity capital (twofold as constant and variable capital), commodity capital again, but as different commodities, the ones that are produced, not the ones that are used in production, and finally money again, but increased money. The problem with the more sophisticated definition, however, is that it applies only to productive capital, and leaves commercial capital and finance capital unaccounted for.

I think that it does account for finance capital quite easily. For example, $1000 is money that purchases a government bond--a commodity--and will, over time via interest payments, return more money and the dissolution of the commodity.

I'm not sure what you mean by commercial capital.


The more sophisticated definition, moreover, is not appliable where the relations of production are not capitalist; and if our bakers do not employ wage labour, as prompted in the OP, then they certainly cannot extract surplus value from anyone else via wages. If they were capitalists, they would have to be unproductive capitalists - but what they certainly aren't, at all, is improductive, since they produce value, in the form of loaves of bread.

Then the problem is with the definition of un/productive capital, is it not?


The bakers can only turn into actual capitalists, or "real capitalists" as you put it, if the redistribution of value to other companies and individuals is not bigger than the difference between M' and M.

Could you expand on this? Are you saying that the surplus value which is created but distributed to the credit card company, insurance company, utility company, etc.... cannot be larger than that extracted from wage labor? For if this was the case then more money would be distributed then created and thus the business would be operating at a loss?

[Hatshepsut]

Fascinating discussion. I think Marx was clear in Vol. 1 of Capital that any product of labor which is useful to a person has use value (when consumed), and if socially useful and converted into a commodity, has exchange value as well. Transportation obviously must have value as shown earlier in the thread; I believe similar arguments apply to other services. Services do have value. This includes the rental of money.

Money lent at usury, whether to businesses or consumers, is converted to capital by running it through the M-C-M cycle just like any other product; only bourgeois economics calls this form of capital "interest." Surplus value can be extracted from Labor in the process as well: from the labor that is done to earn the money to pay off the interest charges.

At least I think so; I don't have a good citation for it yet.

[Luís Henrique]

LH, the argument you provide above is confusing. Marx writes that "productive labor" is that which is exchanged with capital but, as we know, capital is not a thing, rather, a social production relation. I ask, then, how can labor be exchanged with a relation?

Capital is a relation, but it is a relation that is characterised by the exchange of money for labour - and, specifically, labour that produces surplus value. So, if you wish to be extremely precise in your use of language, you can say that "productive labour" is labour that is involved in the relation called "capital".


Furthermore, I can understand that labor must produce surplus value to be considered productive (this, by the way, is a much simpler explanation than that provided above), but, if this is so, then the table is desperately lacking. By this I mean that the teacher in the public school does produce surplus value, only it is returned to the state and not to the private enterprise (it is indeed capitalized upon, just in the hands of the government). Likewise, it would seem, the bookkeeper for the auto company also produces surplus value which is capitalized.

The bookkeeper for the auto company - who seems to be the main divergence here, as it has been called out by ckaihatsu, Sewer Socialist, and yourself - will deserve a post apart.

But regarding the public school teacher, I think you are confusing - as it is almost mandatory among the left nowadays - "value" with "wealth".

If the "public" school is run as a capitalist firm in the hands of the State - ie, if the State sells educational services for a fee in the educational market - then the public teacher produces value, and surplus value, and is exploited like a proletarian, and the State appropriates such value and surplus value, in the form of profit, and acts like a capitalist, and may capitalise its profits (for instance, in hiring more teachers or building new precincts for the school, etc.

But this isn't what most people think when we think of "public schools" - it looks, sounds, and smells, like a private school, just a private school whose private owner is, incidentally, the State. What we usually mean by "public school" is an institution where the State provides educational services for free, or at most at a symbolic fee, that does not cover the costs of the school, paying for the teachers' labour (and for the material infrastructure of the school) without the intention of making profits. And so, an institution where labour is not exchanged for capital (or where labour is not involved in the relation called "capital", if you make a point of non-ambiguity).

The teachers, obviously, do produce wealth, but wealth is not the same thing as value. Value is merely the (predominant) form of wealth in a capitalist society, but it is not its substance. This wealth, in the case of public schools, is freely put at the service of society as a whole, and it will evidently serve capital too, and even foremost, because the society as a whole is capitalist. But it is not appropriated by capital as value.

Luís Henrique

[Luís Henrique]

the waged bookkeeper of a factory is a productive laborer

I agree that this is a difficult case.

Let's imagine, instead of a bookkeeper, a gardner. He or she is hired to keep the garden in front of an automobile factory. Is that person a productive or unproductive worker?

ckaihatsu proposes this method:


One way of 'checking' this is to ask if the services of 'cleaning' and 'delivery' would be considered 'productive' by enterprises that only do cleaning and delivery, respectively -- *of course* they would be considered productive there, because that's what cleaning and delivery businesses are all about, and they exploit the wage laborers who do the actual work of cleaning and making deliveries.

Yes, of course, if we look at the issue from the standpoint of a gardening company, to which the automobile factory "outsources" the gardening of its front garden, the gardner that they allocate there is a "productive" worker; it "produces" the value that the gardening company depends on, including the surplus value that makes the gardening company a capitalist enterprise, reproducing and expanding its capital.

However, to the automobile factory, the garden is not capital: it is not intended to be sold at the market, and it is not a part of what the company intends to sell at the market: there is no fraction of the front garden in any of the automobiles that the automobile factory sells. It is wealth: it is a use value, it makes the factory, or at least its facade, a more agreeable, enjoyable place. But it isn't value and doesn't embody value: it cannot be sold, it is not a commodity.

And so I would dare say that the gardner isn't a productive labourer: he or she doesn't "produce" value, but merely allows the gardening company to share into the (surplus) value produced by the automobile factory. No value is produced here; value is only transferred. As it happens with banks, advertising companies, commercial firms, etc.

Now I think the same line of reasoning can be applied to bookkeepers, with an admitedly huge caveat: while gardening is something a capitalist company will gladly outsource (because it doesn't generate value for it) or simply dispense with (because it isn't really necessary to the trade), bookkeeping is something that a capitalist company may consider not outsourcing, for an obvious reason: bookkeepers will have "classified" knowledge about the company, and it is probably best to keep them loyal to the company by directly hiring them; and it is something that a capitalist company cannot dispense with, both because it needs to understand its internal workings, and because the State will most probably require that the company publishes its results.

But that caveat doesn't seem to me to change the general gist of the thing: the employment of bookkeepers is driven by other necessities that not the accumulation of capital. It represents indeed a burden to such accumulation, a faux frais, just like the salaries of high management.

Luís Henrique

[Luís Henrique]

Unproductive companies go bankrupt--they fail according to capitalist standards. Productivity, according to your definition above, results from labor being exchanged with capital (thus producing surplus value). This can be rephrased as labor power being brought together with the MoP to produce surplus value (through the mechanism of the wage), no?

No, that is not what an unproductive company is.

Unproductive companies are those that do not produce surplus value, but merely get surplus value transferred to them by other companies (or individuals, or the State). They may be very profitable (and productive companies may be quite unprofitable too, btw).

Your other points, later - now, like a good Marxist I am, I must reproduce my labour power, by buying commodities that can replace my expense of muscle, brain, and nerve...

Luís Henrique

[Luís Henrique]

I think that it does account for finance capital quite easily. For example, $1000 is money that purchases a government bond--a commodity--and will, over time via interest payments, return more money and the dissolution of the commodity.

But then, where is the labour employed in generating value here?

Returns on government bonds can only come from someone else's pocket; they are part of a zero-sum game, which is not the case of capitalist production.


I'm not sure what you mean by commercial capital.

Wal Mart, Dillard's, Macy's, C&A, Carrefour, Sears, etc.


Then the problem is with the definition of un/productive capital, is it not?

Yup, the kernel of the question is quite certainly this.


Could you expand on this? Are you saying that the surplus value which is created but distributed to the credit card company, insurance company, utility company, etc.... cannot be larger than that extracted from wage labor? For if this was the case then more money would be distributed then created and thus the business would be operating at a loss?

What I mean is the following:

If I am a baker, I can be a self-employed baker, or I can be a wage slave for someone else's bakery. Being a wage slave will give me a steady source of income - say, $ 900 a month. If I am to run my own bakery, I absolutely must earn $ 900 per month or more from it, or it makes no sence to own a bakery; I would be better off by selling my labour power, and I should get a job, sell my bakery, and use the money to increase my life standard instead.

Luís Henrique

[ckaihatsu]

the waged bookkeeper of a factory is a productive laborer





I agree that this is a difficult case.

Let's imagine, instead of a bookkeeper, a gardner. He or she is hired to keep the garden in front of an automobile factory. Is that person a productive or unproductive worker?

ckaihatsu proposes this method:





One way of 'checking' this is to ask if the services of 'cleaning' and 'delivery' would be considered 'productive' by enterprises that only do cleaning and delivery, respectively -- *of course* they would be considered productive there, because that's what cleaning and delivery businesses are all about, and they exploit the wage laborers who do the actual work of cleaning and making deliveries. It would be no different if these job roles were simply 'in-house', as part of a *larger* enterprise that, for example, bakes bread.





Yes, of course, if we look at the issue from the standpoint of a gardening company, to which the automobile factory "outsources" the gardening of its front garden, the gardner that they allocate there is a "productive" worker; it "produces" the value that the gardening company depends on, including the surplus value that makes the gardening company a capitalist enterprise, reproducing and expanding its capital.

However, to the automobile factory, the garden is not capital: it is not intended to be sold at the market, and it is not a part of what the company intends to sell at the market: there is no fraction of the front garden in any of the automobiles that the automobile factory sells. It is wealth: it is a use value, it makes the factory, or at least its facade, a more agreeable, enjoyable place. But it isn't value and doesn't embody value: it cannot be sold, it is not a commodity.

And so I would dare say that the gardner isn't a productive labourer: he or she doesn't "produce" value, but merely allows the gardening company to share into the (surplus) value produced by the automobile factory. No value is produced here; value is only transferred. As it happens with banks, advertising companies, commercial firms, etc.

Now I think the same line of reasoning can be applied to bookkeepers, with an admitedly huge caveat: while gardening is something a capitalist company will gladly outsource (because it doesn't generate value for it) or simply dispense with (because it isn't really necessary to the trade), bookkeeping is something that a capitalist company may consider not outsourcing, for an obvious reason: bookkeepers will have "classified" knowledge about the company, and it is probably best to keep them loyal to the company by directly hiring them; and it is something that a capitalist company cannot dispense with, both because it needs to understand its internal workings, and because the State will most probably require that the company publishes its results.

But that caveat doesn't seem to me to change the general gist of the thing: the employment of bookkeepers is driven by other necessities that not the accumulation of capital. It represents indeed a burden to such accumulation, a faux frais, just like the salaries of high management.


---





No, that is not what an unproductive company is.

Unproductive companies are those that do not produce surplus value, but merely get surplus value transferred to them by other companies (or individuals, or the State). They may be very profitable (and productive companies may be quite unprofitable too, btw).

Your other points, later - now, like a good Marxist I am, I must reproduce my labour power, by buying commodities that can replace my expense of muscle, brain, and nerve...


I'm thinking that your erroneous take on 'productive' and 'unproductive' labor stems from this false conception of an 'unproductive company'. I've *never* heard this term before and I can't conceive of what it is that you may be referring to with this term. Maybe you mean a 'holding company':





A holding company is a company that owns other companies' outstanding stock. The term usually refers to a company that does not produce goods or services itself; rather, its purpose is to own shares of other companies to form a corporate group. Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies.

In the United States, 80% or more of stock, in voting and value, must be owned before tax consolidation benefits such as tax-free dividends can be claimed.[1] That is, if Company A owns 80% or more of the stock of Company B, Company A will not pay taxes on dividends paid by Company B to its stockholders, as the payment of dividends from B to A is essentially Company A switching cash from one of its pockets to another. Any other shareholders of Company B will pay the usual taxes on dividends, as they are legitimate and ordinary dividends to these shareholders.

Sometimes a company intended to be a pure holding company identifies itself as such by adding "Holdings" or "(Holdings)" to its name.




https://en.wikipedia.org/wiki/Holding_company


This is the *only* definition that I can think of that might validly apply, and, as we can see, a holding company wouldn't be considered as either a 'productive' *or* an 'unproductive' entity since it's just a *legal* designation on paper, and nothing more.

So, again, I have no idea what you may mean by an 'unproductive company' -- I see it as an invalid term.

The gardener *or* the bookkeeper in *any* private firm *would* be 'productive' labor, regardless of the enterprise's profit or loss, or what other companies it contracted with ('outsourced to'), to take care of any of its tasks.

On this thread we've been acting like we're trying to figure out this material *from scratch*, like we exist in some nether-region of space and time, when in fact the meaning of Marx's 'unproductive labor' is quite clear:





Generally, Marx seems to have regarded labour as mainly unproductive from the point of view of capitalist society as a whole, if it involved functions which have to do purely with:

- the maintenance of a class-based social order as such (legal system, police, military, government administration).

- the maintenance and securing of private property relations (police, security, legal system, banking, accounting, licensing authorities etc.).

- operating financial transactions (in banking, financing, commercial trade, financial administration)

- insurance and safety.

- criminal activity.




https://en.wikipedia.org/wiki/Productive_and_unproductive_labour#Marx.27s_critiq ue

[Luís Henrique]

I'm thinking that your erroneous take on 'productive' and 'unproductive' labor stems from this false conception of an 'unproductive company'. I've *never* heard this term before and I can't conceive of what it is that you may be referring to with this term. Maybe you mean a 'holding company':

Evidently holding companies are unproductive, but not all unproductive companies are holdings.

There are companies that share into the global surplus value without producing value: famously, their profits are due to a redistribution of surplus value. Of course, from their own point of view, they are "productive": they are making increased money from their capital, they are "producing profits". But from the standpoint of global capital, they are not. That's the case of the gardening company discussed in my previous post: when considered in itself, it produces profits for its owners; but when considered together with the automobile factory, we see that it doesn't add value. The automobile factory produces an X amount of value; the automobile factory, together with the gardening company, still produce the exact same X amount of value. And so the gardening company is... unproductive.


On this thread we've been acting like we're trying to figure out this material *from scratch*, like we exist in some nether-region of space and time, when in fact the meaning of Marx's 'unproductive labor' is quite clear:


Generally, Marx seems to have regarded labour as mainly unproductive from the point of view of capitalist society as a whole, if it involved functions which have to do purely with:

- the maintenance of a class-based social order as such (legal system, police, military, government administration).

- the maintenance and securing of private property relations (police, security, legal system, banking, accounting, licensing authorities etc.).

- operating financial transactions (in banking, financing, commercial trade, financial administration)

- insurance and safety.

- criminal activity.

Well, "criminal activity" can well be productive, as drug producing certainly is. This list also features "accounting", which I am under the impression that includes bookkeeping, and so it seems that bookkeeping would be unproductive labour. In any case, it is quite clear that some labour can be "unproductive" while being exchanged for capital. How would that be?


The gardener *or* the bookkeeper in *any* private firm *would* be 'productive' labor, regardless of the enterprise's profit or loss, or what other companies it contracted with ('outsourced to'), to take care of any of its tasks.

Profits or losses are hardly material here. An unproductive company is not a company that is losing money; it is a company that is making money by hiring unproductive labourers.

(But how can a capitalist company hire unproductive labourers, if the definition of "unproductive labour" is that it is not sold against capital, but against revenue? Because while the gardeners sell their labour directly against the capital of the gardening company, indirectly they sell it against the revenues of the automobile factory capitalists.

If we remember that division of the value in capitalist companies and petty-bourgeois workshops I proposed here:

http://ideias.wikidot.com/local--files/companhias/imagem.bmp

we can see that the gardening company's surplus value cannot come from the "c" or "a" parts: it comes from the consumption funds of the automobile capitalists. In other words, a part of the surplus value produced at the capitalist factory is not exchanged for constant capital (as would be the part of surplus value that is exchanged for machines or raw material), but for luxury goods for the automobile capitalists (even though they do not buy those luxury goods as individuals, but as part of a capitalist company)).

That would be my answer to my question above: "In any case, it is quite clear that some labour can be "unproductive" while being exchanged for capital. How would that be?"

Luís Henrique

[ckaihatsu]

what would we make of companies that are unproductive? They certainly aren't defined by wage being the bond between means of production and labour power, since they don't produce - and so, their "means" are means of something else, not "means of production".





Unproductive companies go bankrupt--they fail according to capitalist standards. Productivity, according to your definition above, results from labor being exchanged with capital (thus producing surplus value). This can be rephrased as labor power being brought together with the MoP to produce surplus value (through the mechanism of the wage), no?





No, that is not what an unproductive company is.

Unproductive companies are those that do not produce surplus value, but merely get surplus value transferred to them by other companies (or individuals, or the State). They may be very profitable (and productive companies may be quite unprofitable too, btw).





[I] have no idea what you may mean by an 'unproductive company' -- I see it as an invalid term.


To elaborate, I think the concepts of 'productive capital' (invested as both 'fixed' *and* 'variable' capital) (as opposed to purely *finance* capital), and 'productive labor' (as opposed to sheerly intra-ruling-class-management 'unproductive labor') are getting mixed-up in this discussion.

I *still* don't know what might technically be meant by the term 'unproductive company', but I *do* understand that not all companies may always be actively producing commodities -- as we're seeing these days with enormous internal buy-backs of company stocks, for only (financial) capital gains, with no accompanying commodity-production.


---





I think that it does account for finance capital quite easily. For example, $1000 is money that purchases a government bond--a commodity--and will, over time via interest payments, return more money and the dissolution of the commodity.





But then, where is the labour employed in generating value here?

Returns on government bonds can only come from someone else's pocket; they are part of a zero-sum game, which is not the case of capitalist production.


We need to be able to differentiate between the *business* interest in any situation, and any 'efforts' that are utilized by that entity.

So the business / profit-making interest may be for *capital gains* (returns on investment), whether that quantity of capital actually effects *commodity production*, or not -- this would be 'productive' (commodity-producing) vs. 'unproductive' (non-commodity-producing) *capital*.

In the instance of a $1000 government bond, we should recognize that -- due to the interest payments required on it, collected from government *tax* revenue -- the process is that of *rentiership*, at the state level (like rent payments at the individual, private level), and so LH is correct that interest is simply a *draw* on other, pre-existing monetary funds, whether from *capital* that is taxed, or *wages* that are taxed.

But the *efforts* involved in any given enterprise are a *separate* matter, and so we have the categories of 'unproductive labor' (sheerly for the sake of the ruling class' own internal social management), and that of 'productive labor', which is what we conventionally think-of as 'work', since it's exploited and paid-for with wages, and surplus value is expropriated from it by the owners of capital.

We should be careful not to confuse or conflate 'unproductive *capital*' with 'productive' or 'unproductive' *labor* since the two general categories are different and distinct from each other. And, again, there's technically no such thing as an unproductive *company*, since, in the long run, *all* companies will have to exploit wage labor in order to produce commodities, even if such commodities are capital goods. (The government is not a private company.)

[ckaihatsu]

Evidently holding companies are unproductive,


Okay, I don't disagree here -- holding companies, though really more of a *legal* thing, can be politically-economically considered to be 'unproductive'.





but not all unproductive companies are holdings.


I'd really welcome any elaboration or examples here, on what exactly 'unproductive' companies are, according to you.





There are companies that share into the global surplus value without producing value: famously, their profits are due to a redistribution of surplus value. Of course, from their own point of view, they are "productive": they are making increased money from their capital, they are "producing profits". But from the standpoint of global capital, they are not.


You seem to be indicating *finance*-based companies here, but, if that's the case, I would argue that there's no 'sharing' going on, as you keep stating -- surplus value can only be obtained through the *exploitation of labor*, and the involvement of finance is just a formal *abstraction* of that process (as with the ownership of 'shares' that are expecting profit-based 'dividends'), and possibly bet-upon in the markets, which itself requires additional labor inputs.





That's the case of the gardening company discussed in my previous post: when considered in itself, it produces profits for its owners; but when considered together with the automobile factory, we see that it doesn't add value. The automobile factory produces an X amount of value; the automobile factory, together with the gardening company, still produce the exact same X amount of value. And so the gardening company is... unproductive.


I think this here is the *crux* of our differences -- I really don't see how a gardening company, or a 'gardening division' within an automotive company, can be considered to be 'unproductive', since, in either case, the gardening entity is *producing commodities*, namely gardens.

If the automobile factory were to go bankrupt it would list its gardening division as an *asset*, and the gardening division might be sold-off, separately, as a *commodity-producing* gardening company in its own right.

Whether or not *you* consider the gardening division to be adding value or not is beside the point. Maybe the car company includes a single *flower* on all of the cars it sells, or maybe it doesn't -- either way there's tangible flower-*producing* activity going on, and the exploitation of wage-labor to *effect* it.





Well, "criminal activity" can well be productive, as drug producing certainly is.


You're again *conflating* the business entity with its enclosed internal 'efforts', to an erroneous conclusion -- a criminal drug enterprise, itself, is simply taking market share, as a business, from any enterprises that *eschew* such activity because of its illegality. This is the 'unproductive' part (class-internal) that you're referring to, but it is a distinctly *separate* thing from the labor-efforts (including labor-exploitation) *within* it.

So you're pointing out that, internally, it's producing *commodities*, which is correct, and which involves the exploitation of labor, like any other business -- this is why as revolutionaries we see the concepts of 'illegal' and 'criminal' to be merely *class-internal*, since the class division between ownership and wage-slavery remains no matter if the enterprise is 'legal' or 'illegal'.





This list also features "accounting", which I am under the impression that includes bookkeeping,


I'm sorry, but you're arbitrarily *abstracting* the particular function of (bookkeeping) labor, out of its actual social context -- in other words you can't just see the role of 'bookkeeping' and immediately say 'unproductive', in a knee-jerk fashion.

What matters here is whether that bookkeeping is *internal* to the company, paid-for as wage labor, and necessary as part of its commodity-production process, or if it's in relation to larger ruling-class social relations.

For example, if the efforts were about meeting with the Internal Revenue Service and going over the books to iron out any perceived irregularities, such efforts would be 'unproductive' because they're all about intra-ruling-class technicalities over the procedures of corporate management.





and so it seems that bookkeeping would be unproductive labour. In any case, it is quite clear that some labour can be "unproductive" while being exchanged for capital. How would that be?


As with the false concept of an 'unproductive company', I challenge you to provide a single example of 'unproductive labor' that is exchanged for capital.





Profits or losses are hardly material here. An unproductive company is not a company that is losing money; it is a company that is making money by hiring unproductive labourers.


This is a contradiction in terms -- how can a company realize any additional value if the labor being added is 'unproductive' -- ? -- !





(But how can a capitalist company hire unproductive labourers, if the definition of "unproductive labour" is that it is not sold against capital, but against revenue? Because while the gardeners sell their labour directly against the capital of the gardening company, indirectly they sell it against the revenues of the automobile factory capitalists.


Again you're erroneously conflating business-entity 'unproductive expenses against revenue', with 'productive labor' (commodity-producing) that happens to be an *operating expense* for a larger business entity.

In this example the *labor itself* is producing flowers and gardens, and so it *is* 'productive'. At a business-entity level the gardening activity -- whether outsourced or internal -- is an operating expense, or the cost of doing business, which technically may or may not be considered part of the overall production process (of producing cars, or whatever).





Faux frais of production is a concept used by classical political economists and by Karl Marx in his critique of political economy. It refers to "incidental operating expenses" incurred in the productive investment of capital, which do not themselves add new value to output. In Marx's social accounting, the faux frais are a component of constant capital, or alternately are funded by a fraction of the new surplus value.

When owners of capital invest in production, they do not just invest in labor power, materials, buildings and equipment (or means of production). They must also meet a range of other operating expenses. These can include all kinds of things like bookkeeping, training, catering, cleaning & repairs, advertising, insurance, security services, bribes, taxes & levies etc. Marx has in mind mainly those circulation costs directly necessary and indispensable to keep production going, not "fringe benefits".

In modern medium-sized to large-sized business, fixed capital assets will "on average" be the largest single component of the annual tangible capital outlay. After that, materials and wages. But depending on the nature of the business, the faux frais might be a considerable proportion of the total capital outlay.




https://en.wikipedia.org/wiki/Faux_frais_of_production


---





If we remember that division of the value in capitalist companies and petty-bourgeois workshops I proposed here:

[IMG]http://ideias.wikidot.com/local--files/companhias/imagem.bmp[IMG]

we can see that the gardening company's surplus value cannot come from the "c" or "a" parts: it comes from the consumption funds of the automobile capitalists. In other words, a part of the surplus value produced at the capitalist factory is not exchanged for constant capital (as would be the part of surplus value that is exchanged for machines or raw material), but for luxury goods for the automobile capitalists (even though they do not buy those luxury goods as individuals, but as part of a capitalist company)).

That would be my answer to my question above: "In any case, it is quite clear that some labour can be "unproductive" while being exchanged for capital. How would that be?"

[Luís Henrique]

I'd really welcome any elaboration or examples here, on what exactly 'unproductive' companies are, according to you.

Well, we have seen a list of unproductive activities:


Generally, Marx seems to have regarded labour as mainly unproductive from the point of view of capitalist society as a whole, if it involved functions which have to do purely with:

- the maintenance of a class-based social order as such (legal system, police, military, government administration).

- the maintenance and securing of private property relations (police, security, legal system, banking, accounting, licensing authorities etc.).

- operating financial transactions (in banking, financing, commercial trade, financial administration)

- insurance and safety.

- criminal activity.

Some of these activities are conducted by private companies: banking, accounting, financing, commercial trade, insurance. So it seems that there are companies that make their profits mainly or exclusively upon unproductive labour.

I would say that the list of unproductive activities is larger, and this may be contentious, but I think it is well established that there are actually capitalist companies that share into the value of others, without producing any value.


I think this here is the *crux* of our differences -- I really don't see how a gardening company, or a 'gardening division' within an automotive company, can be considered to be 'unproductive', since, in either case, the gardening entity is *producing commodities*, namely gardens.

Yes, I think this is the kernel of the issue.

I have no problems with realising that, from the standpoint of a given company, its capital is productive, as is the labour it employs, since it "produces" its profits.

What I contend is whether a given company is productive from the standpoint of the capitalist system as a whole.

Capital is a cycle: money that buys commodities, that produce different commodities, which have more value thant the first set of commodities, and so can be sold for more money than the original money spent in buying the original commodities.

The surplus value - the difference in value between the first and second sets of commodities - is either spent as unproductive consumption by capitalists, or reinvested in production.

Commodities that are exchanged for renewed capital, either as constant capital as machines, tools, raw material, etc., or as variable capital, as food, public transportation, etc., repeatedly increase the cycle of capital: they are the material expression of capitalist accumulation.

Commodities that are exchanged for that part of surplus value that is not reinvested, inversely, are deductions from capital; they do not increase the cycle of capital, but hamper it; money spent on them is money that is withdrawn from capitalist accumulation, or at most diverted from accumulation in one sector to another.

It all sums up into this: the consumption of capitalists is unproductive. The consumption of labourers is not: by their consumption, labourers re-produce a fundamental condition of capitalist production, labour power. But this is because labour is part of capital as a cycle. Capitalists, on the other hand, do not produce anything, and consequently do not produce value. Any consumption by them (other than the productive consumption of capital itself, which is a different thing), so, is exchanged for money that is being de-capitalised.

From the point of view of capital, capitalists are merely parasites. They are necessary because capital doesn't have hands or brains, and needs someone to do the things that are necessary for its reproduction, besides the sheer production of new value, which is the task of labourers, not of capitalists.

But they aren't, in terms of bourgeois political economy, a "factor" of production.


I'm sorry, but you're arbitrarily *abstracting* the particular function of (bookkeeping) labor, out of its actual social context -- in other words you can't just see the role of 'bookkeeping' and immediately say 'unproductive', in a knee-jerk fashion.

Yes, you are correct; I was doing that, and that is wrong. I should have said that bookkeeping, under some circumstances (and these circumstance are what is of interest here) may be unproductive labour.


This is a contradiction in terms -- how can a company realize any additional value if the labor being added is 'unproductive' -- ? -- !

There is a difference between "producing" value and "realising" value. Such a company doesn't produce value; it appropriates value produced elsewhere. It hires labourers because the value it appropriates has to be somehow brought to it, and it requires human "labour" to do it. So, again, from its own point of view, it is doing what all capitalist companies do - paying labourers (at the value of their labour power) so that they bring to it more value. From the point of view of capital at large, it is paying its labourers not so that they produce value, but so that they transfer value from other companies.


In this example the *labor itself* is producing flowers and gardens, and so it *is* 'productive'. At a business-entity level the gardening activity -- whether outsourced or internal -- is an operating expense, or the cost of doing business, which technically may or may not be considered part of the overall production process (of producing cars, or whatever).

Suppose a capitalist individually hires a cleaning lady to his house. We can agree that this is "unproductive labour", can we?

Now suppose that a capitalist company decides to hire cleaning people to work in all of its executive officers houses (as a "fringe benefit", that probably allows them to circumvent some tax laws and regulations). Is this labour now productive?

Suppose a capitalist individually hires a shoeshiner to go to his home and clean his shoes. Can we again agree that this is unproductive labour?

Suppose the same capitalist decides that the shoeshiner better goes to his office at the company to shine his shoes, rather than to his home. Is this labour now productive?

Suppose the capitalist company decides to hire the same shoeshiner to shine the shoes not only of that individual capitalist, but the shoes of the whole Executive Board. Is this now productive labour?

It is my impression that all those situations remain personal services and are deductions from the accumulation of capital, not part of its cycle of accumulation.

Luís Henrique

[ckaihatsu]

Well, we have seen a list of unproductive activities:




Some of these activities are conducted by private companies: banking, accounting, financing, commercial trade, insurance. So it seems that there are companies that make their profits mainly or exclusively upon unproductive labour.


I'm sorry, Luis, but I *still* see this as an unsound mushing-together of the layers of 'intra-class business matters', and 'productive labor'.

For the sake of clarification, I would advance a two-by-two chart that puts 'business' across the top, and 'effort' going up-and-down, on the left edge -- the two columns for 'business' would be '_intra-class matters_', and '_for-profit_'. (Perhaps you would concur that these are mutually exclusive activities.)

For 'effort' the rows would be '_ownership_', and '_productive labor_'. (Again we might easily say that these two categories are mutually exclusive.)

If this table is agreeable I would then look at each of the four quadrants (cells), to consider each one -- [1] 'ownership', for 'intra-class matters', would unequivocally be 'unproductive labor', by definition.

[2] 'Ownership', 'for-profit', would be anything *internal* to the business / company / enterprise that *wasn't* paid-for as wage-labor.

I'll pause right here to address your post, and make the argument that 'ownership efforts', 'for the sake of profits', and not-paid-for with wages, would *have* to be on the part of ownership *itself*, somehow, or else it would be slave labor, by definition.

Basically I'm questioning your conception of how 'unproductive labor' (non-wage-paid) would contribute to 'banking, accounting, financing, commercial trade, [and] insurance.'

In each case wouldn't it have to be that either ownership itself is somehow *directly contributing* to its own internal efforts, company-by-company, or else the efforts have to be contracted-for and the labor paid-for as 'productive labor' -- ?

The way you're phrasing your statements you're making it sound like business owners across the land are *borrowing each other* and are freely contributing their 'unproductive labor' to each other's white-collar-type needs, with profits resulting.

Wouldn't you recognize that ownership would be constrained to *what it owns*, and that as soon as a company -- *any* company -- requires (white-collar) efforts beyond what its own ownership is willing to put in, it will then have to *hire* 'productive labor' for those tasks, and pay those workers a wage -- ?


---


To continue with the chart, if [3] 'intra-class matters' *cannot* be done by ownership itself, then some professional-type -- a lawyer or accountant -- would have to be brought in and their services would have to be paid for, which would be 'productive labor' in that situation.

And, finally, we have the easy one, which is [4] 'for-profit' work being done by 'productive labor', which is unambiguously wage-labor being exploited and paid a wage, with its surplus value being expropriated by ownership.





I would say that the list of unproductive activities is larger, and this may be contentious, but I think it is well established that there are actually capitalist companies that share into the value of others, without producing any value.


I would really welcome just *one* historical example of this -- I don't see how business entities would be able to 'piggyback' financially off the finances of other ones.

Since you're using the term 'value', though, maybe you mean any case where an already-existing product is reverse-engineered by another company, with that second company deriving 'value' from something that had to be engineered and built-up in the first place by the first company.


---





[I] really don't see how a gardening company, or a 'gardening division' within an automotive company, can be considered to be 'unproductive', since, in either case, the gardening entity is *producing commodities*, namely gardens.





Yes, I think this is the kernel of the issue.

I have no problems with realising that, from the standpoint of a given company, its capital is productive, as is the labour it employs, since it "produces" its profits.

What I contend is whether a given company is productive from the standpoint of the capitalist system as a whole.

Capital is a cycle: money that buys commodities, that produce different commodities, which have more value thant the first set of commodities, and so can be sold for more money than the original money spent in buying the original commodities.

The surplus value - the difference in value between the first and second sets of commodities - is either spent as unproductive consumption by capitalists, or reinvested in production.

Commodities that are exchanged for renewed capital, either as constant capital as machines, tools, raw material, etc., or as variable capital, as food, public transportation, etc., repeatedly increase the cycle of capital: they are the material expression of capitalist accumulation.

Commodities that are exchanged for that part of surplus value that is not reinvested, inversely, are deductions from capital; they do not increase the cycle of capital, but hamper it; money spent on them is money that is withdrawn from capitalist accumulation, or at most diverted from accumulation in one sector to another.


Okay, acknowledged -- once again the elusive factor is that of *scale*. I've been looking at the situation from more of a ground-level perspective.





It all sums up into this: the consumption of capitalists is unproductive. The consumption of labourers is not: by their consumption, labourers re-produce a fundamental condition of capitalist production, labour power. But this is because labour is part of capital as a cycle. Capitalists, on the other hand, do not produce anything, and consequently do not produce value. Any consumption by them (other than the productive consumption of capital itself, which is a different thing), so, is exchanged for money that is being de-capitalised.

From the point of view of capital, capitalists are merely parasites. They are necessary because capital doesn't have hands or brains, and needs someone to do the things that are necessary for its reproduction, besides the sheer production of new value, which is the task of labourers, not of capitalists.

But they aren't, in terms of bourgeois political economy, a "factor" of production.


Agreed.


---





I'm sorry, but you're arbitrarily *abstracting* the particular function of (bookkeeping) labor, out of its actual social context -- in other words you can't just see the role of 'bookkeeping' and immediately say 'unproductive', in a knee-jerk fashion.





Yes, you are correct; I was doing that, and that is wrong. I should have said that bookkeeping, under some circumstances (and these circumstance are what is of interest here) may be unproductive labour.


I think it's safe to say that 'unproductive labor', for 'entity-internal' matters, is practically *synonymous* with the *ownership* of that business. As per the above, if ownership can't cover its own business matters then it's not going to get help for *free* from outside owners of *other* businesses, and so it would have to pull-in 'productive labor' for those tasks, and pay them a wage ('salary', or 'fee').


---





Profits or losses are hardly material here. An unproductive company is not a company that is losing money; it is a company that is making money by hiring unproductive labourers.





This is a contradiction in terms -- how can a company realize any additional value if the labor being added is 'unproductive' -- ? -- !





There is a difference between "producing" value and "realising" value. Such a company doesn't produce value; it appropriates value produced elsewhere.


An example would be great.





It hires labourers because the value it appropriates has to be somehow brought to it, and it requires human "labour" to do it. So, again, from its own point of view, it is doing what all capitalist companies do - paying labourers (at the value of their labour power) so that they bring to it more value. From the point of view of capital at large, it is paying its labourers not so that they produce value, but so that they transfer value from other companies.


But then -- as far as I can see -- that *task*, of 'bringing value', is a *service*, and so is a *commodity*, and is paid-for as a *wage*. Thus it's 'productive labor'.

If the example is a hostile takeover, and someone gets a 'finder's fee' for providing the information, that then is a commodified service that was paid for, regardless of how much money the larger company makes on the acquisition of the smaller company.





Suppose a capitalist individually hires a cleaning lady to his house. We can agree that this is "unproductive labour", can we?

Now suppose that a capitalist company decides to hire cleaning people to work in all of its executive officers houses (as a "fringe benefit", that probably allows them to circumvent some tax laws and regulations). Is this labour now productive?

Suppose a capitalist individually hires a shoeshiner to go to his home and clean his shoes. Can we again agree that this is unproductive labour?

Suppose the same capitalist decides that the shoeshiner better goes to his office at the company to shine his shoes, rather than to his home. Is this labour now productive?

Suppose the capitalist company decides to hire the same shoeshiner to shine the shoes not only of that individual capitalist, but the shoes of the whole Executive Board. Is this now productive labour?

It is my impression that all those situations remain personal services and are deductions from the accumulation of capital, not part of its cycle of accumulation.


Again I'm seeing our differences of interpretation as being based on *perspective of scale*, since you're looking at the term 'unproductive labor' in terms of its function to *all of capital*, while I'm looking at the labor in terms of whether it's being paid a wage and producing commodities, or not.

So the cleaning or shoe-shining is not *itself* 'unproductive labor', it *is* 'productive labor', because it's a service and the cleaner or shoe-shiner has to be *exploited* and paid in wages.

But I agree, that, yes, in terms of *capital*, the money spent -- itself -- is 'unproductive', and may be considered as part of 'fixed', or 'constant' capital:





Faux frais of production is a concept used by classical political economists and by Karl Marx in his critique of political economy. It refers to "incidental operating expenses" incurred in the productive investment of capital, which do not themselves add new value to output. In Marx's social accounting, the faux frais are a component of constant capital, or alternately are funded by a fraction of the new surplus value.

When owners of capital invest in production, they do not just invest in labor power, materials, buildings and equipment (or means of production). They must also meet a range of other operating expenses. These can include all kinds of things like bookkeeping, training, catering, cleaning & repairs, advertising, insurance, security services, bribes, taxes & levies etc. Marx has in mind mainly those circulation costs directly necessary and indispensable to keep production going, not "fringe benefits".

In modern medium-sized to large-sized business, fixed capital assets will "on average" be the largest single component of the annual tangible capital outlay. After that, materials and wages. But depending on the nature of the business, the faux frais might be a considerable proportion of the total capital outlay.




https://en.wikipedia.org/wiki/Faux_frais_of_production

[Luís Henrique]

Basically I'm questioning your conception of how 'unproductive labor' (non-wage-paid) would contribute to 'banking, accounting, financing, commercial trade, [and] insurance.'

I am somewhat in hurry just now, as my duties as an unproductive labourer are demanding some of my attention. But here is a quote by Marx (https://www.marxists.org/archive/marx/works/1885-c2/ch06.htm) that I believe more or less explains what I think concerning the issue of "how 'unproductive labor' (non-wage-paid) would contribute to 'banking, accounting, financing, commercial trade, [and] insurance":


In order to simplify the matter (since we shall not discuss the merchant as a capitalist and merchant’s capital until later) we shall assume that this buying and selling agent is a man who sells his labour. He expends his labour-power and labour-time in the operations C — M and M — C. And he makes his living that way, just as another does by spinning or making pills. He performs a necessary function, because the process of reproduction itself includes unproductive functions. He works as well as the next man, but intrinsically his labour creates neither value nor product. He belongs himself to the faux frais of production. His usefulness does not consist in transforming an unproductive function into a productive one, nor unproductive into productive labour. It would be a miracle if such transformation could be accomplished by the mere transfer of a function. His usefulness consists rather in the fact that a smaller part of society’s labour-power and labour-time is tied up in this unproductive function. More. We shall assume that he is a mere wage-labourer, even one of the better paid, for all the difference it makes. Whatever his pay, as a wage-labourer he works part of his time for nothing. He may receive daily the value of the product of eight working-hours, yet functions ten. But the two hours of surplus-labour he performs do not produce value anymore than his eight hours of necessary labour, although by means of the latter a part of the social product is transferred to him

So, here, we have:


a wage labourer;
who performs a necessary function;
who, according to Marx, creates no value;
who, according to Marx, works a part of his time for nothing;
whose two hours of surplus-labour, according to Marx, do not produce value anymore than his eight hours of necessary labour;
to whom, according to Marx, a part of the social product is transferred, by means of his 'necessary labour'.


And so, we have that Marx believed in the possibility, and actual existence, of unproductive wage paid labour - contributing, in this case, to "commercial trade".

Of course, it is well possible that Marx is wrong here. But this would entail an altogether different criticism of the notion of "unproductive wage paid labour" than you seem to be offering.

A few paragraphs below, in the same source, you will find this:


Apart from the actual buying and selling, labour-time is expended on book-keeping, which besides absorbs materialised labour such as pens, ink, paper, desks, office paraphernalia. This function, therefore, exacts the expenditure on the one hand of labour-power and on the other of instruments of labour. It is the same condition of things as obtained in the case of the time of purchase and sale.

As unity within its circuits, as value in motion, whether in the sphere of production or in either phase of the sphere of circulation, capital exists ideally only in the form of money of account, primarily in the mind of the producer of commodities, the capitalist producer of commodities. This movement is fixed and controlled by book-keeping, which includes the determination of prices, or the calculation of the prices of commodities. The movement of production, especially of the production of surplus-value — in which the commodities figure only as depositories of value, as the names of things whose ideal existence as values is crystallised in money of account — thus is symbolically reflected in imagination. So long as the individual producer of commodities keeps account only in his head (for instance, a peasant; the book-keeping tenant-farmer was not produced until the rise of capitalist agriculture), or books his expenditures, receipts, due dates of payments, etc., only incidentally, outside of his production time, it is palpably clear that this function and the instruments of labour consumed by it, such as paper, etc., represent additional consumption of labour-time and instruments which are necessary, but constitute a deduction from the time available for productive consumption as well as from the instruments of labour which functions in the real process of production, enter into the creation of products and value.[12] The nature of the function is not changed — neither by the dimensions which it assumes on account of its concentration in the hands of the capitalist producer of commodities and the fact that instead of appearing as the function of many small commodity-producers it appears as the function of one capitalist, as a function within a process of large-scale production; nor is it altered by its divorcement from those productive functions of which it formed an appendage, nor by its conversion into an independent function of special agents exclusively entrusted with it.

Division of labour and assumption of independence do not make a function one that creates products and value if it was not so intrinsically, hence before it became independent. If a capitalist invests his capital anew, he must invest a part of it in hiring a book-keeper, etc., and in the wherewithal of book-keeping. If his capital is already functioning, is engaged in the process of its own constant reproduction, he must continually reconvert a part of his product into a book-keeper, clerks, and the like, by transforming that part into money. That part of his capital is withdrawn from the process of production and belongs in the costs of circulation, deductions from the total yield (including the labour-power itself that is expended exclusively for this function).

And so, it would seem that what we have previously established concerning Marx's reasoning on "commercial trade" can be extended to "bookkeeping".

And even further into the text (under the subsection (c) Money), we find a discussion of the "production" of gold and silver (as general equivalent commodities, ie, money), and (under the section II. Costs of Storage) of storage, as unproductive - and (under section III. Costs of Transportation) a discussion of transportation, and of why, contrarywise to sales, bookkeepping, storage, and money-minting, it is a productive activity.


https://en.wikipedia.org/wiki/Faux_frais_of_production

Oh yes. Wikipedia. According to it, there are 11 million "Arab Brazilians (https://en.wikipedia.org/wiki/Arab_Brazilian)". In its talk page (https://en.wikipedia.org/wiki/Talk:Arab_Brazilian#A_question_for_Opinoso_about_n umbers.2C_quotients.2C_and_FACT_tags), a demonstration of why this figure is utterly absurd. In the article proper, the continued fable. What to expect from a source which metod can only be described as a bad paraphrase of Mandeville, "private ignorance, public wisdom"?

Luís Henrique

[ckaihatsu]

I am somewhat in hurry just now, as my duties as an unproductive labourer are demanding some of my attention. But here is a quote by Marx (https://www.marxists.org/archive/marx/works/1885-c2/ch06.htm) that I believe more or less explains what I think concerning the issue of "how 'unproductive labor' (non-wage-paid) would contribute to 'banking, accounting, financing, commercial trade, [and] insurance":



So, here, we have:


a wage labourer;
who performs a necessary function;
who, according to Marx, creates no value;
who, according to Marx, works a part of his time for nothing;
whose two hours of surplus-labour, according to Marx, do not produce value anymore than his eight hours of necessary labour;
to whom, according to Marx, a part of the social product is transferred, by means of his 'necessary labour'.


And so, we have that Marx believed in the possibility, and actual existence, of unproductive wage paid labour - contributing, in this case, to "commercial trade".


Okay, noted.





Of course, it is well possible that Marx is wrong here. But this would entail an altogether different criticism of the notion of "unproductive wage paid labour" than you seem to be offering.


What exactly are you taking to be as my criticism of 'unproductive wage paid labor' -- ?





A few paragraphs below, in the same source, you will find this:



And so, it would seem that what we have previously established concerning Marx's reasoning on "commercial trade" can be extended to "bookkeeping".

And even further into the text (under the subsection (c) Money), we find a discussion of the "production" of gold and silver (as general equivalent commodities, ie, money), and (under the section II. Costs of Storage) of storage, as unproductive - and (under section III. Costs of Transportation) a discussion of transportation, and of why, contrarywise to sales, bookkeepping, storage, and money-minting, it is a productive activity.



Oh yes. Wikipedia. According to it, there are 11 million "Arab Brazilians (https://en.wikipedia.org/wiki/Arab_Brazilian)". In its talk page (https://en.wikipedia.org/wiki/Talk:Arab_Brazilian#A_question_for_Opinoso_about_n umbers.2C_quotients.2C_and_FACT_tags), a demonstration of why this figure is utterly absurd. In the article proper, the continued fable. What to expect from a source which metod can only be described as a bad paraphrase of Mandeville, "private ignorance, public wisdom"?


What I'm seeing from our exchanges is that there's a definite 'gray area' when it comes to ascribing whether something is to be seen as 'fixed'/'concrete' capital, or whether it's to be seen as 'faux frais' (operating costs).

The shoeshining example is an apt one here -- it could be argued that 'shiny shoes' are an indispensable part of doing business, and is really part of the business itself, and thus 'fixed capital', while on the other hand it could be argued that shiny shoes is just one of those things that is a *cost* to business, in order to *do* business, and so is really an 'operating expense'.

I think discussions like these are the 'unproductive labor' of doing Marxism...! (grin)

[Luís Henrique]

What exactly are you taking to be as my criticism of 'unproductive wage paid labor' -- ?

I think there is a strong tendency within the left, influenced by general bourgeois ideology, to make the equations, productive=good and unproductive=bad. This gives origin to "producerism", which is an ideology that distinguishes "good" productive capital from "bad" (and probably "Jewish") unproductive capital, arguing for an alliance with the former against the latter. My impression was that you tended to identify my position with that deviation, or to believe that it would leave an open door to such, and that that was the mobile of your argumentation.

But a criticism based into the idea that those paragraphs by Marx are wrong would probably stem from a different problematic - that of whether capitalists play a productive role in the capitalist system, and, so, of whether their consumption plays an actual role in the reproduction and accumulation of capital.


What I'm seeing from our exchanges is that there's a definite 'gray area' when it comes to ascribing whether something is to be seen as 'fixed'/'concrete' capital, or whether it's to be seen as 'faux frais' (operating costs).

The shoeshining example is an apt one here -- it could be argued that 'shiny shoes' are an indispensable part of doing business, and is really part of the business itself, and thus 'fixed capital', while on the other hand it could be argued that shiny shoes is just one of those things that is a *cost* to business, in order to *do* business, and so is really an 'operating expense'.

See, if you argue that shiny shoes are an indispensable part of doing business, you are ascribing a productive role to the consumption of capitalists, which I reckon is only possible if capitalists play a productive role in the cycle of capital.

There is a difference, in my opinion, between those cleaners who clean the factory, and those who clean the offices of higher administration: the former help reproduce the conditions of capitalist accumulation, and are consequently productive and labour productively; the latter only reproduce conditions of circulation, and are consequently improductive, as is their labour.

It is not a moral distinction, and actually the same labourers could perform the same tasks, producing value in the morning while cleaning the factory, and redistributing value in the afternoon while cleaning the offices.


I think discussions like these are the 'unproductive labor' of doing Marxism...! (grin)

That may be, but let's not forget that unproductive labour is not less necessary than productive labour. ;)

Luís Henrique

[ckaihatsu]

I think there is a strong tendency within the left, influenced by general bourgeois ideology, to make the equations, productive=good and unproductive=bad. This gives origin to "producerism", which is an ideology that distinguishes "good" productive capital from "bad" (and probably "Jewish") unproductive capital, arguing for an alliance with the former against the latter. My impression was that you tended to identify my position with that deviation, or to believe that it would leave an open door to such, and that that was the mobile of your argumentation.


Ethnic stereotypes aside, there *is* a valid distinction to be made between objectively progressive ('good'), productive capital, and objectively *privatizing* ('bad'), *unproductive* capital. The difference is that between equity capital, which can be a vehicle for economic development, and rentier capital, which only draws upon pre-existing funds gotten from revenues and wages.

To clarify, though, I stand by my position on all of this as previously expressed in this thread:





It all sums up into this: the consumption of capitalists is unproductive. The consumption of labourers is not: by their consumption, labourers re-produce a fundamental condition of capitalist production, labour power. But this is because labour is part of capital as a cycle. Capitalists, on the other hand, do not produce anything, and consequently do not produce value. Any consumption by them (other than the productive consumption of capital itself, which is a different thing), so, is exchanged for money that is being de-capitalised.

From the point of view of capital, capitalists are merely parasites. They are necessary because capital doesn't have hands or brains, and needs someone to do the things that are necessary for its reproduction, besides the sheer production of new value, which is the task of labourers, not of capitalists.

But they aren't, in terms of bourgeois political economy, a "factor" of production.





Agreed.


---





But a criticism based into the idea that those paragraphs by Marx are wrong would probably stem from a different problematic - that of whether capitalists play a productive role in the capitalist system, and, so, of whether their consumption plays an actual role in the reproduction and accumulation of capital.




See, if you argue that shiny shoes are an indispensable part of doing business, you are ascribing a productive role to the consumption of capitalists, which I reckon is only possible if capitalists play a productive role in the cycle of capital.


No, you're overgeneralizing -- I'm only talking about the necessity of *shiny shoes*, for business, which is on par with the necessity of *capitalist persons* themselves, for business. (See the quoted part of a past post of yours, above.)

We *could* generalize 'shiny shoes' to the larger, overall consumption on the part of capitalists (from new, incoming surplus value), and ask the same question of 'fixed-capital-or-operating-costs' for *all* of it. (In other words from the point of view of capital itself it would rather not have to make outlays for *infrastructure* for commodity production, which adds into the M-C-M' cycle, any more than it wants the costs of capitalist-person *consumption* expenses.)

So I'm *not* arguing that 'shiny shoes' -- consumed by capitalists -- is 'productive', I'm simply saying that it's a gray-area as to whether 'shiny shoes' is indispensable to production, or not. (Could the production of shoes, for example, be accomplished *without* the expense of shiny shoes for capitalists -- ? Maybe, but *is* it done that way, or do we find that shiny shoes *are* an expense, for the sake of production, no matter *what* the particular factory happens to produce -- ?)

Since we happen to find shiny shoes in *every* business and factory that is involved with production maybe 'shiny shoes' is as important to production as the walls of a factory.





There is a difference, in my opinion, between those cleaners who clean the factory, and those who clean the offices of higher administration: the former help reproduce the conditions of capitalist accumulation, and are consequently productive and labour productively; the latter only reproduce conditions of circulation, and are consequently improductive, as is their labour.


I *hear* you, but I can't help but think that even in the latter case there is a *commodity* being produced, that of 'office-cleaning', at least at the very circumscribed extent of higher-administration-office-cleaning. (And I'm saying this *empirically*, not politically.)

Note that cleaning labor is still being exploited, the cleaning workers are being paid a wage, and the surplus value of their labor is being expropriated by their boss.

As before in this thread I think you're glossing over the differentiation between the function of *capital* regarding 'unproductivity', and the function of *labor* regarding 'unproductivity'.





It is not a moral distinction, and actually the same labourers could perform the same tasks, producing value in the morning while cleaning the factory, and redistributing value in the afternoon while cleaning the offices.


Understood.


---





I think discussions like these are the 'unproductive labor' of doing Marxism...! (grin)





That may be, but let's not forget that unproductive labour is not less necessary than productive labour. ;)


Certainly not less necessary when it comes to *class struggle* -- !