As Marx
says, “Labour is value.” (Capital III, Chapter 49). But,
as Marx also says in Capital I, for labour to be value
creating, it must be purposive. That is, it must produce a use value, something that someone finds useful and wants. In Capital
I, Marx sets out that such a use value, that is the result of
labour, is a product, and to the extent that such products are
exchanged against each other, on the basis of these relative values,
they are commodities. But, what about the expenditure of labour that
does not result in a physical product? Does that also create value?
The question caused problems for Adam Smith, and other economists of
the time. Marx's answer is straightforward, where labour is
expended, not in the creation of a physical product, but where its
product is the act of labour itself, which provides a labour service
to the consumer, it is just as much value creating, as any other form
of labour.
The issue
caused problems for Adam Smith, because he had two different theories
of value, although he did not recognise it. But, also Smith had two
different definitions of productive labour, the first one correct,
and the second one false. Smith represented an advance over the
Physiocrats, in the fact that he took over from them the
understanding that surplus value is created in production, but where
for them, value was use value, and they only recognised the use
values produced in agriculture as representing new value creation,
Smith recognised that value was labour, and the measure of value was
labour-time.
Smith,
therefore, begins with a labour theory of value, and a theory whereby
surplus value is created in production, which in itself is an advance
over the Mercantilists who believed that the surplus value was
produced as a result of exchange. So long as production and exchange
is conducted by independent producers, each of whom exchange their
output with other such producers, Smith's Labour Theory of Value
is fine. Producer A expends 10 hours of labour producing a metre of
linen, whilst producer B expends 10 hours of labour producing a litre
of wine, and so A exchanges their linen for B's wine, and this
amounts to A exchanging 10 hours of their labour-time, for 10 hours
of B's labour-time.
This indeed
is the basis of the exchange of commodities at their values, which
also underpins the exchange of commodities, under capitalism, at
their prices of production. Put another way, and a way that Smith
also expresses it, the value of A's metre of linen, is the quantity
of labour it can command, whether that labour is in the form of a
litre of wine, or a quantity of some other commodity, which also
represents 10 hours of labour-time.
But, Smith
himself recognised that as soon as producers do not themselves own
their means of production, this equality disappears, and this
definition of value, also ceases to apply, or at least for Smith, it
seems to cease to apply. In reality, it only seems to cease to
apply, because Smith failed to recognise the difference between
labour, as the essence and measure of value, and labour-power, which
is the use value that the labourer possesses, and which is the
commodity which the wage-worker sells.
If A has a
litre of wine, which represents 10 hours of labour-time, it may
appear to command the labour of 10 singers for an hour, but what, in
fact, it commands is the product of those 10 singers, in the form of
10 hours of entertainment. The fact, that the product of this ten
hours of labour is not a physical product, that it exists only in the
form of the actual performance, so that it is consumed simultaneously
with its production, does not change that.
Smith noted
that when it comes to an exchange of labour with capital, or with
landed property, this equality no longer existed. It appeared that
the owner of capital, for example, was able to obtain command over a
greater value than they were giving away in wages, because whilst
they might give out, for example, £1 in wages, the value of the
commodities produced by the workers they employed, might be increased
by £2. The additional £1 of surplus value, was thereby
appropriated by the capitalist. Smith, thereby also puts forward a
second theory of value, which is based upon the cost of production of
the commodity, and this cost of production breaks down into the
revenues obtained by the different factors of production. This is
also the basis of Smith's absurd theory, as Marx describes it, that
the value of output resolves itself into these factor incomes of
wages, profits, rent and interest. That absurd theory remains,
however, the basis of modern bourgeois economic theory, and of the
computation of the national accounts for output, income and
expenditure.
Smith's
correct definition of productive labour, was that labour which
exchanges with capital, rather than revenue. In other words, it is
labour which is productive of surplus value. But, Smith as a result
of his dichotomous theory of value, also put forward a second
definition of productive labour, which is that labour which produces
a physical product. As Marx describes in Theories of Surplus
Value, this is a relapse by Smith into Physiocratic theory. It
does not matter whether labour produces a physical product, or a
non-physical product, such as a labour-service, in determining
whether the labour is productive or not, only whether that labour
produces surplus value. As Marx puts it, the labour of a teacher
working in an education factory, is just as productive as that of a
worker whose labour is employed in a sausage factory.
A
prostitute, who provides a labour service directly to customers is
not a productive worker. But, that is not because the nature of the
labour undertaken makes it so. If the prostitute works in a brothel,
and is employed by a capitalist brothel keeper, that labour is then
productive, not because the nature of the labour or the labour
process has changed in any way, but because the prostitute now sells
labour-power to the brothel keeper as a commodity, and the brothel
keeper then employs that labour-power so as to create a new value in
excess of the value of the labour-power bought. It thereby becomes
productive of a surplus value, which can be accumulated as additional
capital.
By contrast,
as Marx sets out, a tailor produces a physical product, in the shape
of a suit, a dress, or a pair of trousers. But, the physical nature
of this product, in no way determines whether the tailor's labour is
productive or unproductive. If the tailor is employed in a
capitalist factory, producing these items, their labour is productive
of surplus value. But, if the tailor comes to my home, and produces
these things for me to consume, their labour is not productive,
because it does not result in the production of surplus value.
The reason
for a lot of the confusion, as Marx says, was that at the time the
advance of capitalist production had meant that nearly all
commodities, as physical products, were the consequence of capitalist
production, whilst it was only labour services, such as those of
domestic servants, gardeners, prostitutes and so on, which were
provided directly by their producers. This gave the false impression
that it was only these physical products that were capable of
producing surplus value.
But, as Marx
shows in his various examples, in Theories of Surplus Value,
it is not the nature of the labour that is determinant, but the
specific capitalist context within which it takes place. An actor
employed by a capitalist theatre owner, is a productive labourer.
They sell their labour-power to the theatre owner, at its value. The
theatre owner then employs that labour-power, and creates new value
in the shape of a performance, for which customers pay, and thereby
realise, for the theatre owner, the value of this production,
including the value of the surplus value produced by the actors. The
surplus value is the difference between the value of the actor's
labour-power, bought by the theatre owner, and the new value created
by the actors by the expenditure of their labour.
In today's
economy, unlike that of Marx's time, 80% of the economy comprises
service industry. It is made up of workers who do not produce a
physical product, but who undertake some form of labour service.
Unlike in Marx's time, these services are provided by service workers
who are themselves employed by capital, rather than selling that
service directly to consumers. The number of cooks employed by
households has fallen dramatically, for example, but the number of
chefs and other cooks employed by a growing number of restaurants,
has grown enormously, as an increasing proportion of household income
has gone into the consumption of these kinds of service products,
rather than physical products. The cook employed by a household, was
an unproductive labourer, but the same cook employed in a restaurant
is a productive labourer. They produce surplus value.
In fact,
some of the greatest elements of new value creation, and of surplus
value production, today comes from labour employed in such labour
services, and the production of non-physical products. The following is the breakdown by the ONS for UK household expenditure in 2012.
Transport
|
65.70
|
Recreation
and culture
|
63.90
|
Housing
(net)1, fuel and power
|
63.30
|
Food
and non-alcoholic drinks
|
54.80
|
Restaurants
and hotels
|
39.70
|
Miscellaneous
goods and services
|
38.60
|
Household
goods and services
|
27.30
|
Clothing
and footwear
|
21.70
|
Communication
|
13.30
|
Alcoholic
drinks, tobacco and narcotics
|
12.00
|
Education
|
7.00
|
Health
|
6.60
|
Total
COICOP expenditure
|
413.90
|
Other
expenditure items
|
69.70
|
Total
expenditure
|
483.60
|
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