Non-productive labour (2010)

Book Review from the July 2010 issue of the Socialist Standard

Global capitalism in crisis. Karl Marx and the Decay of the Profit System.  By Murray E. G. Smith, Fenwood Publishing, Canada. 

 Marx left an ambiguous legacy on “unproductive” labour in that two different theories about it can be found in his writings. The first – which was essentially that of classical political economy going back to Adam Smith – was that labour exchanged against capital was productive while labour exchanged against revenue was not. The logic behind this was that labour employed by capital not only reproduced its own value but also a surplus value over and above this, and so increased the amount of wealth in existence; labour employed out of income such as rents or profits, as for instance on domestic servants, did not result in this but, on the contrary, used up existing wealth.

 But what about labour employed by capital invested in trading and in banking? This also added nothing to the amount of wealth, let alone value, already in existence but still yielded a profit for the capitalist employer of such labour. Marx’s explanation was that productive capitalists in effect handed over a part of the surplus value produced by their workers to these non-productive capitalists who were carrying out an essential function for the capitalist economy (if they didn‘t do this they would have to lay out some of their own capital to cover these activities). The workers in these non-productive employments produced no surplus value themselves but helped acquire surplus value for their employers. So, (second theory) it was possible even for some labour exchanged against capital to be non-productive.

 Murray Smith discusses another category of labour – that employed by the state – which fell into the category of “non-productive” (unless the state itself was involved in production). In Marx’s day – or rather in the days of Smith, Ricardo, Malthus and the others whose ideas Marx discusses – the assumption was that this was akin to the labour of domestic servants and so a drag on capital accumulation.

 In those days this may well have been true since most government employees then were either concerned with collecting taxes or were place-hunters milking the state. Today, however, this is no longer the case. Most national and local government employees are engaged in activities, such as the education and health care of workers, which are just as essential to capitalism as trading and banking. Can they really still be assimilated to domestic servants, i.e. to more or less frivolous spending by the idle rich?

 Murray Smith argues that they should not be. He suggests that expenditure on them should be classified together with the labour of trading and banking workers under the general heading of “socially necessary unproductive labour” (SNUL). He goes further and argues that they and the equipment they use should be assimilated rather to Marx’s concept of “constant capital”, i.e. as capital which merely transfers its value to the new product. From this perspective the taxation which pays for it is not a deduction from surplus value but a part of the capital outlay of the capitalist class as a whole (“social capital”).

 Smith wants to do this mainly because, by transferring such spending from s to c, it reduces the average of profit (s/(c+ v), considerably in fact, so supporting his theory that a fall in the rate of profit caused by c increasing faster than v (expenditure on productive labour) is the main cause of recurring capitalist crises. Quite apart for any decline in the rate of profit for this reason being a long run tendency that  would be too slow to affect cyclical crises,  state spending in reality impacts on the crucial rate of profit after tax (rather than before tax), hence the interest of capitalist firms is keeping state spending down if they can.

 Smith is a dyed-in-the-wool Trotskyist, a supporter of an organisation called the “International Bolshevik Tendency”, a name calculated to make the hair of genuine socialists stand on end. So you need to ignore all the arguments about China being a “deformed Workers State”, about the Bolshevik coup having been a socialist revolution, about the need for a vanguard party, a transitional programme of reforms, etc. etc to get at his basic argument about SNUL.

Adam Buick

Now for pro-socialism (2000)

Editorial from the November 2000 issue of the Socialist Standard

On 26 September the latest in a series of events under the banner of anti-capitalism took place. This one was in Prague, and it followed similar events over the past two years in Seattle, Washington, London, Melbourne and elsewhere. The term "event" is used loosely to cover various forms of protest. According to the UK Prague edition of People's Global Action (PGA), protests include:

Strikes - demonstrations - critical mass bike rides - carnivals - street parties - reclaiming streets, government land or office buildings - music - dancing - speeches - handing out flyers - banner hangings - distributing community-controlled newspapers - street theatre - guerrilla gardening - handing out food - mock trade fairs - offering no-interest loans outside major banks

Faced with such a multi-faceted onslaught, it might be thought that capitalism would have felt shaken to the core. In the event it turned out to be what the New Statesman of 8 May said of the London carnival: "Just a pinprick for capitalism." It could not have been otherwise. PGA describes itself as "not an organisation but aims to support and strengthen the many growing grassroots struggles across the globe." Struggles against capitalism? Well, yes, as a declared aim.

In practice, all groups like PGA are doomed to fail to achieve their stated aims because those aims are entirely negative. They say they oppose capitalism, they are going to get rid of it, but they do nothing to put something fundamentally different in its place. So they end up at best with a slightly modified version of the system they "oppose". At worst, the time and energy wasted on reforms enables those who run capitalism to brush aside, to patronise, and even laugh at the protestors.

What do the capitalist media think of anti-capitalism protests? Of course they don't like the associated violence. The protestors "besmirch the Czechs proud history of peace", complains the Daily Telegraph (27 September). The Independent (28 September) notes that the approach of the IMF and the World Bank towards the opposition has been to debate with it. The head of the IMF said that "he welcomed the protests because they have made the IMF aware of poverty". Really? It just hadn't noticed it before, was that the problem?

The reaction of the Trotskyist press to the protestors is unsurprisingly two-faced. Rightly they recognise that the forces gathered for mass action in Prague were a very mixed bag: "insurgent youth mixed anti-authoritarianism, utopianism, and idealist third-worldism with liberal, single-issue reformism . . . a default political identification for dissident youth is 'anarchism', which can mean anything from vegetarian lifestylism to syndicalist trade unionism". (1917, Journal of the International Bolshevik Tendency, September).

But in that same issue the "deformed" workers' states of China, Cuba, Vietnam and North Korea are to be defended against "imperialist aggression".

We repeat what we said in a leaflet Against Capitalism?, produced and distributed in response to the London May protests:

"For a revolution to be any good, you have to be FOR something, besides being AGAINST capitalism. Any fool can be against capitalism. Some people are just against BIG capitalism (WTO, IMF, World Bank, GATT, etc) as if somehow 'small' national capitalism is a completely different thing, and perfectly nice. It's not. They're the same . . .Capitalism is commodity production for sale on a market. Instead of that you could have co-operative production for use and free distribution on the basis of need. This would involve no markets, no money, no commodities, no private property, no rich class and poor class, no Third World and First World, no profit-led profligacy of any description, and amazingly, no ecological destruction, no famine, virtually no crime, and no war."