“ What the labourer has to pay from these wages to State and Church is a deduction for services which are forced upon him...”, in relation to the welfare state. The welfare state forcibly extracts payments from workers, in the form of taxes and national insurance, and forces workers, thereby, to consume the minimum of these commodities capital deems necessary for the optimum reproduction of labour-power. In this context, it does not matter that the teachers are employed by the capitalist state, rather than by individual capitalist schools. The teachers simply exchange their labour-power with state capital, rather than private capital. But, it is this exchange with capital that defines it as productive, not whether education itself is productive or not, when bought by workers.
The distinction between education as productive of labour-power, and the services of physicians as not, itself seems odd, because besides the role of physicians in bringing new workers into the world, they facilitate the duration of that labour-power.
At the time he was writing, and well into the 20th century, his comments about workers providing other services for themselves is correct. But, after WWII, the Co-op Laundry took on some of the functions of domestic labour, the welfare state took on other functions, in relation to care of the young and the elderly that previously had been the function of domestic labour, via extended families. In the 1960's and 70's, launderettes emerged, prior to the introduction of cheap, automatic, domestic washing machines, and so on.
This in itself is an indication of the point made earlier about value existing as a consequence of the expenditure of labour, whether or not the product of that labour takes the form of a commodity that is exchanged. Not only did workers recognise that their expenditure of labour on these domestic tasks represented value, and so were prepared to expend value, as money, to buy these appliances, so as to reduce that expenditure of their labour-time, but capital itself recognised it.
By reducing the amount of time spent unproductively on domestic labour – unproductive, because it produced no surplus value – it increased the potential supply of labour-power that could be employed productively. In the process, it was also able to realise some of the additionally produced surplus value, by selling a wide range of domestic appliances. (See also: Value Theory, The Transformation Problem And Domestic Labour - Part 4)
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