An important distinction

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Marx discussed the concepts of productive and unproductive labour in Capital and it has been a source of debate ever since.

There was an interesting letter in last month’s Socialist Review from Ken Muller. In it he questioned the approach taken by my recent book, A Reader’s Guide to Marx’s Capital, to the concept of “productive labour”.

Ken’s argument is that my definition of productive labour — actually Marx’s definition — as labour hired by capital which produces surplus value (the source of profit) is too narrow.

Surely, he argues, public sector workers, such as those in health and education, are also productive. Furthermore, what about labour in societies such as the Soviet Union where everyone was employed by the state? Am I arguing that all labour in such societies is unproductive?

First, it is important to understand that when Marx talks of productive and unproductive labour he is not offering a moral evaluation of what labour is useful to society. If he were, work in health and education would certainly be productive, as would, say, domestic labour that goes into raising children or caring for elderly dependents.

On the contrary, Marx is talking about capitalist production, the prime motive of which is to expand capital by pumping surplus value out of exploited wage labourers.

In Marx’s Capital productive labour is labour hired by capitalists to create a commodity (whether a tangible good or a service) that contains surplus value. Marx adds that commodities are typically created by “a collective labourer”, not isolated individuals.

In order to be a productive labourer, one merely has to be an “organ of the collective labourer and…perform any one of its subordinate functions”.

However, for Marx, and for me, this “collective labourer” is the ensemble of workers hired by a particular capitalist necessary for the production of a given commodity — it does not extend to every group of workers across the whole of society responsible for creating the infrastructure necessary to capitalism.

As Ken says, teachers and health workers are certainly necessary for the capitalist system to reproduce itself, through the education and maintenance of the labour force.

Ken ought to add that capitalism also necessitates police officers and judges who defend private property. By Ken’s criteria these too would be “productive”; by mine they are unproductive.

Furthermore, there are groups of workers in banking and finance, which are a central part of the capitalist system, who very few Marxists would regard as productive. The workers employed here are hired to help capitalists in the financial sector capture some of the surplus value generated elsewhere in the economy, for instance through interest payments on loans issued by banks.

Not only does capitalism base itself on both productive or unproductive labour, but sometimes states also hire productive labour, for instance in the case of a state-run car manufacturer. Here commodities are produced on the basis of the exploitation of wage labour, just as in the private sector.

However, if public sector workers who provide services such as health and education are treated as productive labourers, generating surplus value for the state, it is hard to make sense of the drive to privatise public services.

Privatisation, among other things, turns services that are a drain on potential profits for the capitalist class as a whole (insomuch as the taxation of businesses pays for them) into a potential source of profit for some capitalists.

However, privatisation can also undermine the reproduction of the capitalist system, because the desire of particular capitalists to maximise their profits by cutting corners can clash with the need for these services among the capitalist class generally.

There will be divisions in the ruling class over how far privatisation should go in any given period of history, and the distinction between productive and unproductive labour is essential to our attempts to understand this.

The approach I am suggesting does not come unstuck when considering state capitalism in countries such as the former Soviet Union.

Tony Cliff, who pioneered the theory of state capitalism, argued that viewed in isolation the Soviet Union was like a single factory with an elaborate internal division of labour. Factory owners do not sell commodities to themselves from one part of their factory in order to use in another, nor do they allocate labour strictly in accordance with Marx’s law of value.

However, Cliff showed that, when viewed within the context of the global capitalist order, the state bureaucracy that ran the Soviet Union was compelled to compete with capitalist ruling classes elsewhere, especially militarily.

That required state capitalist societies to replicate features associated with more traditional forms of capitalist society — exploiting workers, building up the economy through accumulation at the expense of consumption, and so on.

That also means, just as in Western capitalism, different kinds of productive and unproductive labour have to be combined across the economy, all of it, in this case, hired by the state.

Cliff’s approach is perfectly consistent with Marx’s approach and with mine.