Productive Labour - Part 3 of 15

Marx thereby makes clear that the distinction between productive labour and unproductive labour has nothing to do with whether the commodity produced is beneficial or not, it has nothing to do with the type of activity, but only whether the labour exchanges with capital rather than revenue. For Marx, following Smith's first definition, productive labour means simply productive of surplus value.

But, Smith has a second incorrect definition of productive labour. In this second definition, Smith slips into a definition whereby labour is productive which produces not surplus value, but merely value. The reason Smith ends up also proposing this second definition is because he falls back into a Physiocratic conception.

The Physiocrats argued that only agricultural labour was productive. Marx points out, in Theories of Surplus Value, that they were the first to correctly identify that the source of surplus value is production. In agriculture, the output of products – use values – is greater than the products used to produce that output. A certain quantity of seed, for example, is used to produce the output, and a further quantity of products is required to plant and cultivate the crops to produce the output. At the end of this production, not only is there enough of these products to replace the seed, and replace the food paid as wages to the workers, but a surplus product exists over and above this, which is paid as rent to the landowner.

For the Physiocrats, at the time they were writing, rent is still the form which surplus value assumes.

In the Physiocratic model, the origin of the surplus value was a free gift from nature. It was on this basis that the owner of the land, which provided this free gift, claimed the rent. Land was the source of surplus value, and agricultural labour was the source of value. Smith goes beyond the Physiocratic conception, by defining value as labour rather than use value. For Smith, the basis of surplus value is no longer the difference between the use values that go into the production process, and those that come out of it, but the difference between the value of inputs – determined by the labour-time required for production and the value of output.

Its here that Smith then finds himself in another quandary, because he does not distinguish between labour and labour-power. On the one hand, Smith determines the value of commodities on the basis of the labour-time required for their production, on the other he equates this with wages, as the value of labour, but, in that case, surplus value becomes impossible.

For the Physiocrats, industrial labour is not productive, because it does not produce any additional product; it only takes what has been produced by agriculture – raw materials which are processed, and food which is consumed by the worker – and transforms them into a different set of commodities. In this scheme, they only take what agriculture has produced, transform it, and hand it back.

They treat the industrial labourer and capitalist as essentially the same. No surplus value is produced, the profit of the industrial capitalist is just a form of wage, required for their reproduction, the same as for the worker. That value was produced in agriculture, and is just added to the value of the material, so no surplus is possible.

But, for Smith, value is identified with the expenditure of labour, not with use value, and so the industrial worker is just as productive as the agricultural worker, because they create new value by their expenditure of labour. But, in determining productive-labour, Smith falls back into the Physiocratic system, because like them, he considers only the expenditure of labour in the production of material products as productive.

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